Most liked posts in thread: TrueCar, not good deal in the long run

Thing is, you don't have to haggle. Research it at your leisure, come up with a fair price, and it's either yes or no. If you're price is fair, someone somewhere will take it. I don' t haggle at all, haven't done it in years.

 

If people get that lazy, it's their own fault. It's not too hard to get a dealer invoice and go from there...

As long as there is consumer reports, etc., there will be people still working toward reasonable prices. Unless TrueCar becomes some magical entity slanted in the consumers favor, people will continue to shop around and haggle--these are high priced items that we for the most part put a lot of thought in purchasing. I don't see it getting to the point where people will take any one single entities voice as the final say on such a large and infrequent transaction.

 

By that line of reasoning, if a car is good, a dealer should charge whatever they want for it, and we should buy it. We should not bother to shop around, we should be willing to pay any price the dealer throws out because it's a good car. Maybe we should extend that to all products? Um, no. The merits of a car do not set it's price. Supply and demand do.


You want to get rid of huge discounts? Don't start with a ridiculously high price. MSRP is a joke for the majority of cars out there. Their are volume dealers who sell at slightly above invoice a do very, very well. It can be done.

Easy way? just deal off the dealer invoice, and get rid of the MSRP sticker altogether. But no one wants that type of transparency.

So much goes into this--quotas, time of year, time of month, incentives, there will never be a set price for a vehicle, it fluctuates. And that's ok in a free market society.

 

Spoken like a true used car salesman. :wink:

 

I have a friend who is a retired car salesman. His last job was selling new Toyotas. He said a good negotiator could beat the USAA and/or Costco prices. I'm sure the same thing would apply to True Car. However, if a person is not a strong negotiator those prices are better than a stick in the eye.

 

I just bought a new car, and when scouring the internet for price information on both the car and my trade in, stumbled across TrueCar. The price they advertised was way, way inflated. I contacted 5 dealers with a price on what I'd pay for the car, and what I would accept on the trade in (basically went a little higher than the lowest number I was seeing on the new car, and a little lower on the highest number I was seeing on the trade in--the numbers were fair), first one to match those numbers gets my business. I probably could have gotten even better numbers, but they were good enough, and although I don't want to be gouged, I don't want to be unrealistic toward the dealer either. 3 of the dealers were really, really bad, one was basically false advertising. One dealer probably would have been ok (in fact I might have done a bit better on prices there, nothing dramatic though, but I had the deal with with the other remaining dealer in a few minutes, and I didn't want to break my word). One phone call, 2 emails, done. And several thousand dollars less than what TrueCar was spouting out.

 

It's not that great for the dealers. Reading the industry news I've learned TrueCar charges 299-399 for each contact that leads to a sale. Lets look at CCT's interaction.

He, in his own words, stumbled across TrueCar. However he went on and did his own thing. Now if the dealer he ultimately bought the car from is a subscriber to their service TrueCar the lead and subsequent purchase are from them, and they'ed put their hand out to be paid even thought it seems as CCT did his own homework.

Recently, Autonation, the country’s largest new-car retailer dropped the service. The biggest issue in the dispute: TrueCar demanded that AutoNation share all of the retailer’s customer information for all of its transactions, not just TrueCar-related deals.

That would mean turning over information covering a laundry list of 41 data points on the approximately 550,000 vehicles sold by AutoNation annually. Of those sales, AutoNation attributes just 3 percent, or about 16,500, to TrueCar.

For TrueCar, losing AutoNation as a customer is the latest blow in a series of high-profile challenges. The company is facing multiple lawsuits filed earlier this year by dealers, shareholders and the California New Car Dealers Association. TrueCar had rebuilt its dealer roster after nearly folding in 2012 when regulators in multiple states accused it of violating a variety of advertising and brokering laws.

Full article - http://www.autonews.com/article/20150709/RETAIL/150709862/autonation-drops-truecar-in-contract-dispute

 

I guess I wasn't clear....what does it do to the resale value of those who bought a vehicle just before the discounts applied?

In the GMC example above, it just dropped another $10K thru no fault of yours....other than you bought a week too early or something.

But all GMC trucks of that type are now worth $10K less.......

something similar happened back in the day with Mercedes 300 series cars, the new models came out $6k less base sticker price than the previous year's models, the guy who just bought that last year's model and though he got a great deal? Not so much now......

The best thing that could happen to the car industry is if everything sold at sticker, then people would buy on the merits of the car instead of the "deal"...

 

Saturn did not fail due to the pricing strategy. Saturn failed because of a management change at GM and the UAW. They wanted to bring Saturn in line with the GM and UAW way of doing things. The parts sharing, the universal labor contracts. The same basic tenets that eventually were the downfall of the monolithic GM.

Thats the Forbes take on the matter. - Forbes Welcome

Now the Harvard Business Review takes a different view on the matter saying that Saturn was a mistake from day 1. - https://hbr.org/2009/10/weep-not-for-saturn-the-brand

The early years at Saturn could almost be compared to the early years of MINI. When owners were also engaged with the company and the company was also engaged with the owners. There are comparisons that make sense...

Saturn used it own parts - So did MINI. When the later models of Saturn started parts sharing in the GM parts bin the cars started to less desirable. Et tu MINI?

In the 1st generation Saturn demand outstripped production. MINI as well. Then the 2nd generation came along. Saturn was stuck with their pricing model, MINI on the other hand had to offer 0% financing and attractive lease deals.

Saturn created a culture of excellent customer service. so did MINI dealers, at first. Now look at how many that were once friendly to clubs have closed that avenue.

 

Um, no. I chose the car first, then research what others are paying for it, then come up with a reasonable price. The vehicle I just purchased was a Sequoia, a low volume relatively high priced vehicle with little wiggle room on a deal.

If I bought the deal first, I'd have gotten a Tahoe. (And that's not a slam on Tahoe's, the new ones are fantastic, in many ways better than the Sequoia, but the Sequoia fitted exactly what I wanted).

 

Nope, the market would determine sales just as it does now....if the perceived value doesn't measure up to the sticker, the sales results will be obvious and an adjustment will be made, just as it is currently doing with the $10K discounts on GMC trucks.

Why the hell would any dealer want to do business off the invoice? In no other business in the world does a customer expect to purchase something for cost plus. Why would it be that way with cars?

The free market handles real estate prices just fine, it can do the same for cars.

You go into Sears and expect to see the invoice for that $10K box full of tools? How about with your Snap On dealer?

Dealing off invoice is why you have $150/hr shop labor rates and sky high parts prices.

Dealing off invoice is a stupid way for any dealer to do business, and the ones that do don't last long, or they make it up on the back end.

You guys all want to buy straight from the manufacturer, you think Ford is going to show you what it really costs to build that F-150? You think Tesla is?Who's going to pay for warranty work at $100 over invoice?

That new Belchfire 5000 is not worth buying at sticker, but if you can get it for invoice plus $100 it's a great buy? Why? Either it's worth what its priced at or it isn't, that $1000 discount doesn't all of a sudden make it a better car, or even a better buy.

How many cars a month would a dealer have to sell at $100 over invoice to pay the rent on a $10 million building? Plus all the employees? Support staff? Taxes? Utilites? Inventory? Parts stock? and on and on?

You guys are completely unrealistic when it comes to buying new cars.

 

Same thing for the dealer tho, right?

The problem with your argument is who and how is it decided what the fair price is? Fair to whom?

What could the dealer do that would be more logical? Remember the manufacturer sets the sticker price, not the dealer - unless they do an add-on sticker. So the most they can make is already determined by the mfr, you want to determine the least they can make - how would you do that?

It's unworkable.....all around.

Put up the sticker price and have everyone pay it - resale values will rise and the market will be much more orderly.

If a car's perceived value via the sticker is too high, people won't buy the car. Simple.

True Car will go out of business cause no one will feel like the other guy got a better deal.

 

Actually, Saturn failed due to other issues... like GM not giving a **** about the real mission behind Saturn.

Eventually the cars were just piecemealed heaps cobbled together with the other brand's leftover platforms and pieces.

Initially, Saturn was a hit.

 

I have found my new job as a retired guy & don't call me surely.

 

Enjoy it my friend.

I don't think I ever see myself retiring despite my best efforts to establish a decent amount of savings.

 

Keep saving friend you will get to this age much sooner than you realize. One day you will wake up & say what the fark how did I get this old. :eek6: I am very thankful I thought ahead & saved for retirement.

 

Boy I hear that!

You know Zillon, sometimes the best way to close a deal is simply to tell the customer no.

I had a lady wanting to buy a Porsche 944 and the offers she made were just not gonna do it, so I went in , thanked her for the opportunity to do business and wished her a good evening. She was shocked!

Then she said "Well, what can you do"?

I gave her the same price I'd already penciled back twice and she wrote a check.

But I'm serious about what I wrote earlier - people expect the "show", the back and forth and so on, and if you don't give it to them they feel like they were cheated, even if they get exactly what they want.

The psychology of sales is fascinating, but it can me mentally wearying too.

 

Many years ago, negotiating with a used car salesman, my co-pilot kept tossing out counter offers. I just sat there enjoying the fireworks. The salesman disappeared for a few two or three times for 'advice' but one time he left without his paperwork and we noticed on it a scribbled comment: "Put away your gun Calamity Jane". Calamity done us good on the price, too.

 

Most people don't like to haggle on a car. For them there are car buying services and things like true car. I use to have a business like that in college. Fast way to make some beer money