TrueCar Not True Friend of Dealers

I’m leaving Las Vegas again, sitting at McCarran airport waiting to board the red-eye back to Atlanta.

This is the ninth time I have been a speaker at a Las Vegas event this year. Never thought I’d say it, but I am more than a little burned out on Las Vegas. I have two more speaking events scheduled there this year.

The latest one was at AutoCon2012, a new first-time Internet and technology conference.

I delivered the opening keynote address and conducted a workshop on Internet sales. The surprise of the evening came when they awarded me the “Lifetime Achievement Award.”

In the center of the conference’s exhibit area was a huge, generously staffed TrueCar booth. The firm was the major sponsor. Even the hotel room keys had its logo on them.

TrueCar is sponsoring every dealer-related event around in order to re-introduce itself as a friend of the dealer. Scott Painter’s company has hired a small army of public relations people to try to repair a damaged image after the industry and various government regulators rapped his business model.

Dealers objected to TrueCar generously arming consumers with pricing information. Some dealers suspected the data came from their computer systems. Some state franchise-law enforcers objected to TrueCar giving dealers leads for free, then charging up to $400 if a car sale resulted. That’s considered bird-dogging in some states.

One TrueCar executive, Michael Timmons, formerly of AutoNation, is a great guy. He and I communicate regularly, although I have told him in no uncertain terms that I don’t trust his company or CEO Painter. Still, Timmons is a friend.

He took me to dinner at a nice restaurant in Las Vegas. Because TrueCar was paying for it, I searched the menu for the most expensive entrees, although I held back on ordering the V.S.O.P. cognac.

He told me that TrueCar has transformed itself. The company realizes dealers are its customers. I left there with a good feeling. Maybe it was time to rethink TrueCar.

The next day at lunch, I was with a dealer from Arizona. He asked if I were still crusading against TrueCar. I told him, “No, I am actually lightening up on them, because they’ve made significant changes.”

That’s when he handed me a newspaper article from The Arizona Republic. The story was about the document fees dealers charge for handling registration, titling, licensing and assorted paperwork related to a vehicle purchase.

This is what the paper reported:

“‘In states like Arizona, it has turned into an additional source of revenue,’ TrueCar Vice President Jesse Toprak said. ‘Dealers hope you don't notice (the fee)…’

“Toprak described the doc fees in some states as ‘the Wild West,’ with no laws limiting the amount that can be charged and when it has to be disclosed.

“Toprak said the doc fee is just one of several areas ‘a dealer can bury profits’ all of which are dealt with in the finance office as paperwork is being signed. Among the other profit centers Toprak cited were warranties, financing options, insurance, paint-protection plans and accessories.

Doc fees appear as a separate line item, but Toprak said some dealers don’t point it out to buyers.”

Burying profits? Hoping you don’t notice? Apparently, TrueCar wants consumers to feel the way it does: Dealers are crooks.

I felt like a fool, talking to this dealer, with several other dealers at the table hearing me say I was lightening up on TrueCar and suggesting we give them another chance.

They haven’t changed, only their public image has changed. The culture of the organization remains, more than ever, anti-dealer. They’ve just glazed that over, except when interviewed by the press.

Keep those phone calls and emails coming. I love to hear from you.

Jim Ziegler, president of Ziegler Supersystems, is a trainer, commentator and public speaker on dealership issues. He can be reached at [email protected]. WardsAuto readers also may comment on this article by logging in or registering below.