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Old 03-10-2015, 07:29 AM   #1
AVANTI R5
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Default TrueCar sued by dealers for 'false advertising'

Company expects to be 'fully vindicated'



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Dealers representing 117 new-car franchises are suing TrueCar Inc. for more than $250 million, claiming they are victims of false advertising and unfair competition.
The lawsuit was filed today in U.S. District Court in New York by dealer lawyer Leonard Bellavia of Mineola, N.Y. TrueCar disputed the claims and vowed to fight the suit.



In the complaint, the dealers argue that TrueCar’s advertisements falsely claim that consumers who use the vehicle-shopping site’s services can buy a car without haggling or negotiations. The filing dealers are not current users of TrueCar, though some have used the service in the past.
The dealers who filed the lawsuit “have lost sales and have suffered injury to their goodwill and business reputation as a result of TrueCar’s false advertising claims,” the suit says.
Said Bellavia: “They’re seeing their customers jump ship.”


False-advertising charge
Vehicle buyers are drawn to TrueCar and its subscribing dealerships by advertisements that promise a no-haggle experience but fail to deliver as promised, Bellavia said. Such advertising violates the Lanham Act, the federal false-advertising statute, Bellavia said.
In addition to the $250 million-plus sought by the suit, the plaintiffs are asking the federal court to enjoin TrueCar’s advertising.
"We are aware that a complaint has been filed on behalf of a group of dealers who are not on the TrueCar program. We believe the complaint is without merit," TrueCar spokesman Alan Ohnsman said. "We will vigorously defend ourselves and our business practices and expect to be fully vindicated.”



The lawsuit says, “Despite its advertising claims to the contrary, TrueCar does not ‘remove surprises’ at the dealership.”
Consumers, the lawsuit says, “will be surprised to learn” that “the promised vehicle may not be in stock, and may not be available at the advertised price or financing terms.
“TrueCar’s false or misleading advertising,” the suit continues, includes “false ‘no-haggle’ claims,” “bait-and-switch” advertising, “false factory invoice claims,” “false financing claims,” “false transparency claims” and “false rebate claims.”


Lost sales
The dealerships participating in the lawsuit generally lose at least three and more typically seven sales a month because of TrueCar’s advertising, Bellavia said.
At a likely gross profit of at least $2,000 per vehicle and a loss of three sales a month, Bellavia estimates the damages at $432,000 per store over a four-year period. He described the four-year period as the two years leading up to today’s filing and the two years it likely would take to get to trial. At the loss of seven sales a month, damages would amount to just more than $1 million over four years, he said.
Those calculations also assume lost annual service revenue of $1,000 a year per vehicle.


Besides lost sales and, therefore, lost service business, the lawsuit says dealers suffered from lost profits when dealers had to match or exceed TrueCar’s false prices and terms, the loss of a trade-in that could have been sold, and the loss of manufacturer incentives.


‘Deceive’
After describing TrueCar’s advertising and how its website and “Guaranteed Savings Certificate” work, the lawsuit repeatedly argues that TrueCar “has intentionally set out to deceive the public.”
Moreover, any fine-print disclaimers, the lawsuit says, “are insufficient to alleviate consumer deception.”
For example, the suit contends that TrueCar’s claims of “transparency” are “literally false.”


According to documents filed as part of the lawsuit, “TrueCar advertises: ‘No Surprises. Our TrueCar Certified Dealer Network believes in transparency so you can trust that everything is upfront and out in the open. No hidden costs or surprise fees. Ever.’”
Those documents continue: “However, TrueCar’s affiliated dealers pay fees to TrueCar for customer referrals,” specifically, $299 for every new vehicle and $399 for every used vehicle sold from a TrueCar price offer or dealership introduction. “These are hidden fees which are not disclosed to consumers,” the lawsuit states.


“The loss of customer goodwill, and the destabilization of Plaintiffs as viable businesses, are injuries that cannot be remedied by monetary damages,” the suit states, “and thus require preliminary and permanent injunctive relief, prohibiting TrueCar from continuing with its illegal advertising and promotional activities.”
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Old 03-10-2015, 08:38 AM   #2
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It's a smear campaign because those dealers in the suit WANT to be able to bait and switch, prop up add'l features, sell undercoating, etc... As a user of truecar in the past, it is seamless. You agree to a price, check the car is in stock, go buy it. No tricks, no nothing. It worked exactly as advertised.

Truecar exists to weed those dealers out, and will not do business with those that thrive on deceptive practices (like those in the suit).

--kC
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Old 03-10-2015, 08:49 AM   #3
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Yup... I used it to buy my last wrx and will use it to my next car especially if it's an sti. It's also free for usaa members. I won't buy from a dealer that doesn't agree to those prices.

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Old 03-10-2015, 09:31 AM   #4
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^^
Hmm free for usaa members, How much does it cost to use true car? I went to their site quickly looking for my answer but really didn't see it.
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Old 03-10-2015, 09:39 AM   #5
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Truecar is amazing for commodity cars. I've used them for a few cars through USAA. What KC said is pretty much completely true. Truecar takes away all the stupid games which car dealers use to make money. Car dealers are just test centers, distributors and service centers, the age where people had to go to a dealer to walk people through the car buying process has LONG past. I know exactly what car, trim, color and options I want when I walk into a dealership.

Do people really still walk into dealers with the "I'd like a big car and uhh..." mentality?
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Old 03-10-2015, 09:52 AM   #6
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Quote:
Originally Posted by AVANTI R5 View Post
^^
Hmm free for usaa members, How much does it cost to use true car? I went to their site quickly looking for my answer but really didn't see it.
Truecar costs nothing for consumers. I did get cheaper pricing outside of Truecar when I bought my car, but it is still a great resource.
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Old 03-10-2015, 09:55 AM   #7
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Originally Posted by industrial View Post

Do people really still walk into dealers with the "I'd like a big car and uhh..." mentality?
Absolutely.
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Old 03-10-2015, 10:15 AM   #8
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Truecar costs nothing for consumers. I did get cheaper pricing outside of Truecar when I bought my car, but it is still a great resource.
Thank you..I see the commercials all the time and have wanting to try it out but figured it was just another expense for the lazy or un educated car buyer. Thanks again
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Old 03-10-2015, 10:26 AM   #9
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Quote:
Originally Posted by industrial View Post
Do people really still walk into dealers with the "I'd like a big car and uhh..." mentality?
You mean people who don't frequent internet car enthusiast message boards? Yes. Heck, my wife, who's generally a pretty smart cookie, has trouble identifying the brand of car she's looking at. (Hey, dorkus, they put badges on them for a reason).

I've used Truecar several times now and it works as advertised, it's also not the only game in town, Costco offers a similar service, though with less numbers-based backup.
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Old 03-10-2015, 10:59 AM   #10
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My last several cars I've had no issues getting good prices. There are people that have no clue, young computer savvy people. Couple friends of mine were buying a new Sienna and the dealer gave them some crap about the SE being some sort of "limited version" and they couldn't give a discount. Total BS of course. I set them straight and they got one $1,000 below invoice.

Buying a car these days is easy. Find out what you want, find out the invoice price minus any current incentives and contact via email several dealers in your area and say how much below "that" price can they give it to you for. Then you just pick the cheapest one.

The only time you can have any difficulty is when you are trying to buy a true limited edition car like a Hellcat or similar.
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Old 03-10-2015, 11:22 AM   #11
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Used TRUCAR for 15 WRX base with Homelink and Short Shift, $25,400 plus dealer, tag and tax. Absolutely no pressure sale even the closer wasn't too Slimy, only issue was they weren't used to a Personal Check for the full amount. Total process took less than 1.5hrs.

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Old 03-10-2015, 11:24 AM   #12
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I use truecar as a bargaining tool. Those dealerships are just trying to get rid of a tool empowering buyers to make decisions on their own without pressure and last minute marketing gimmicks.

While I didn't use truecar service for buying my evo, I did use it to say "here's the average sale price for an evo in your area, Lewisville Mitsubishi. I think I'm better than average, so let's go $500 below that, putting me into the 'great' price range, and I'll book a flight now."

They accepted the offer, which was right at invoice, and I booked my flight.
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Old 03-10-2015, 12:26 PM   #13
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Originally Posted by Genericuser1 View Post
My last several cars I've had no issues getting good prices. There are people that have no clue, young computer savvy people. Couple friends of mine were buying a new Sienna and the dealer gave them some crap about the SE being some sort of "limited version" and they couldn't give a discount. Total BS of course. I set them straight and they got one $1,000 below invoice.

Buying a car these days is easy. Find out what you want, find out the invoice price minus any current incentives and contact via email several dealers in your area and say how much below "that" price can they give it to you for. Then you just pick the cheapest one.

The only time you can have any difficulty is when you are trying to buy a true limited edition car like a Hellcat or similar.

yeah i liked the pric truecar gave so i called the dealer they recommended and he said, "Oh yeah that sounds good! Just bring in your print out and we will get you that price." Thought it was too good to be true and i was out of there in under an hour to sign the papers.
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Old 03-10-2015, 01:00 PM   #14
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Originally Posted by WRXHillClimb View Post
I use truecar as a bargaining tool. Those dealerships are just trying to get rid of a tool empowering buyers to make decisions on their own without pressure and last minute marketing gimmicks.

While I didn't use truecar service for buying my evo, I did use it to say "here's the average sale price for an evo in your area, Lewisville Mitsubishi. I think I'm better than average, so let's go $500 below that, putting me into the 'great' price range, and I'll book a flight now."

They accepted the offer, which was right at invoice, and I booked my flight.
Exactly. Some dealers are still trying to leverage high pressure sales tactics to milk people and TrueCar scares them. I don't even bother with dealers like this and don't give them my business when it comes to having warranty or service work performed either. I will go out of my may to have my car serviced at the dealer that gave me the best price (within reason).
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Old 03-10-2015, 09:22 PM   #15
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We used truecar thru the USAA website when we purchased my wifes 2010 Mazda 3S. I had printed out the truecar price guarantee for a base model 2011. When we got to the dealer, I cut a deal for the 2010 Sport at a better price than the truecar price on the 2011 base model. I've used it also to get my Priuses. I used it on my 2010 Prius and when I traded the 2010 for a 2013. It is a good service.
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Old 03-10-2015, 09:29 PM   #16
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yeah, before truecar, unless you know others that have bought that same car it was very hard to get real info on what others have been paying. You sure as hell couldnt rely on the scumbag dealer. Now there are other sites with purchase tracking info on it as well i think edmunds or others like that show it as well. My local dealer laughed when i told him what price i was gonna buy a 12 wrx limited for so the next day i went and bought one in Atlanta for my price.
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Old 03-10-2015, 09:30 PM   #17
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Had someone today who had a truecar printout... dealer promised them that they would honor the price and had the car. Problem is when you search inventory they don't have the car. TrueCar is the biggest load of bs to get people in the door and bait and switch.
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Old 03-10-2015, 10:05 PM   #18
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Had someone today who had a truecar printout... dealer promised them that they would honor the price and had the car. Problem is when you search inventory they don't have the car. TrueCar is the biggest load of bs to get people in the door and bait and switch.
had a dealer tell me that when i was researching where to buy my wrx they said, "Yeah truecar we honor that!" Then you get there and they are like "oh.... That's for IN STOCK vehicles only. We cant do that price if we have to order it..." I was like um yeah right and left.
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Old 03-10-2015, 10:07 PM   #19
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Yeah. I mean clearly I am able to search the inventory since I am a salesperson. They didn't even have one incoming or on order. I told my customer... you're welcome to go see if they'll honor that truecar price but even if the price was zero they don't have a car on their lot to sell you.
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Old 03-10-2015, 10:12 PM   #20
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its funny bc that dealer that said that wasnt in the "truecar network" it was just the local subaru dealer that is notorious here for being ****ty. The one i got in touch with off the car buying service website had no trouble letting me order one and use that price. It has paid off for them bc i have since bought my wife that outback from them and will most likely buy an sti from them in 16 if i guy one.
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Old 03-11-2015, 12:30 AM   #21
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Originally Posted by Dmochowski View Post
Yup... I used it to buy my last wrx and will use it to my next car especially if it's an sti. It's also free for usaa members. I won't buy from a dealer that doesn't agree to those prices.

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Quote:
Originally Posted by WRXHillClimb View Post
I use truecar as a bargaining tool. Those dealerships are just trying to get rid of a tool empowering buyers to make decisions on their own without pressure and last minute marketing gimmicks.

While I didn't use truecar service for buying my evo, I did use it to say "here's the average sale price for an evo in your area, Lewisville Mitsubishi. I think I'm better than average, so let's go $500 below that, putting me into the 'great' price range, and I'll book a flight now."

They accepted the offer, which was right at invoice, and I booked my flight.
Quote:
Originally Posted by Dmochowski View Post
yeah, before truecar, unless you know others that have bought that same car it was very hard to get real info on what others have been paying. You sure as hell couldnt rely on the scumbag dealer. Now there are other sites with purchase tracking info on it as well i think edmunds or others like that show it as well. My local dealer laughed when i told him what price i was gonna buy a 12 wrx limited for so the next day i went and bought one in Atlanta for my price.

Interesting thing about truecar. Tells the customer what others have been paying in your area? WHAT is your area? Several hours to the next dealer for us. One of the first few customers that approached us with their "truecar" price(which we are not a part of), showed us a price that was below hold back. Ummm. No. WE certainly didn't sell that price and the boss is good with the other close dealers and they hadn't either......

And before you go saying "they lied", maybe. Doubt it though. We have good relationships with most of them. Not going to stab each other in the back. In the south, where there is low inventory on high demand cars, dealer trading is essential. Dealer trading easily accounts for 25% of our sales. Truecar is "good" for cities with multiple dealers(ex: Atlanta. Not Chattanooga) where volume is more the game. Chattanooga is near/in the mountains and WE sell more than they do(not right now though. Slow start). No reason to knock off all that money off a car that we can't keep in stock. Foresters? Crosstreks? BRZs? Sure... Outback, WRX, STI? Sorry.

So, back on topic. I would say they were "false advertising" in our "area".

Last edited by JustyWRC; 03-11-2015 at 12:32 AM. Reason: Forgot to put my point in.
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Old 03-11-2015, 12:38 AM   #22
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They get their info from lots of places, one of which is registration data. They have a big thing about how low sales volume or extremely new cars can cause a wide range and many standard deviations, etc. They aren't false advertising anything.
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Old 03-11-2015, 01:53 AM   #23
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Car dealerships claiming to protect customers from false advertising by suing a consumer information website, now that's chutzpah.
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Old 03-11-2015, 03:50 AM   #24
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Interesting thing about truecar. Tells the customer what others have been paying in your area? WHAT is your area? Several hours to the next dealer for us. One of the first few customers that approached us with their "truecar" price(which we are not a part of), showed us a price that was below hold back. Ummm. No. WE certainly didn't sell that price and the boss is good with the other close dealers and they hadn't either......

And before you go saying "they lied", maybe. Doubt it though. We have good relationships with most of them. Not going to stab each other in the back. In the south, where there is low inventory on high demand cars, dealer trading is essential. Dealer trading easily accounts for 25% of our sales. Truecar is "good" for cities with multiple dealers(ex: Atlanta. Not Chattanooga) where volume is more the game. Chattanooga is near/in the mountains and WE sell more than they do(not right now though. Slow start). No reason to knock off all that money off a car that we can't keep in stock. Foresters? Crosstreks? BRZs? Sure... Outback, WRX, STI? Sorry.

So, back on topic. I would say they were "false advertising" in our "area".
Smells like price fixing
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Old 03-11-2015, 07:22 AM   #25
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Dealer swaps account for maybe 10 percent of our sales. We certainly wouldn't be swapping in or out high demand cars. If you can pick one off before it gets to port you'd have a better shot but TrueCar HAS to give you pricing on every car configuration. If someone came in with a TrueCar on a Launch Edition with a guaranteed buy price I'm sure you all have a Launch Edition to sell them. They're giving quotes on cars and packages that don't exist. They also don't account for supply and demand.
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