File Taxes Online? Then Why Not Buy Cars That Way, Too?

DETROIT – TrueCar President and CEO Mike Darrow says his wife is such an avid online shopper, he typically “walks over three Amazon boxes to get inside my home.” (Today’s rules engagement: They’re your purchases to bring in.)

The success of Amazon and other e-enterprises inspired Darrow and his colleagues to create TrueCar + as a way to amp up digital auto retailing.

“From a shopping perspective, the auto industry needs to play catch-up,” Darrow says during a presentation at an Automotive Press Assn. event here.

TrueCar started 14 years ago as a consumer website with vehicle inventory pricing information from dealer clients. Sales leads were sent to dealership clients for follow-ups.

Lead referrals remain the company’s main business, but as its name implies, nascent TrueCar + takes the company’s offerings further.

Mike Darrow (002)

TrueCar + allows participating dealers to serve as order fulfillment centers. But Darrow (pictured, left) emphasizes how essential dealers are in TrueCar’s new “open market” business model.

“Dealers are our business partners,” he says. “We’re not trying to put them out of business but to modernize the auto retail environment. We think it works better this way.”

He adds: “Don’t believe the myth that digital will push retailers out. We can’t do this without dealers.”

Darrow says that TrueCar + relies on three things to work: ease of use, efficiency and transparency that is based on no-haggle pricing.  Dealers are asked to provide inventory with transactional prices.

Darrow isn’t a fan of traditional dealer-customer price negotiations (which aren’t occurring much in these seller’s-market days of inventory shortages).

“Think about it,” he says of sticker dickering. “A dealer is trying to build relationships with customers after spending hours negotiating a car deal with them.”

As the liaison in the open-market model, TrueCar must “pay attention to both sides,” Darrow says.

That means the Santa Monica, CA-based company must make it pain-free and worthwhile for consumers. On the other hand, “if you don’t have dealer interest, you don’t have the supply, even if you have the consumer interest.”

What about skeptics who say a vehicle purchase is too complicated for a consumer to do online?

Darrow responds that many people on their own digitally fill out and file their income tax forms. “It can’t possibly be harder to buy a car than to deal with the IRS. We know this can be done.”

He predicts that by 2025, online new- and used-auto retailing will reach about 23 million units a year, 40% of the market. (It was 10% in 2020.)

Steve Finlay is a retired Wards senior editor. He can be reached at [email protected].