Lessons from TrueCar
A byproduct of the recent changes to the TrueCar.com business model highlight how archaic and out-of-touch many state franchise laws have become in the age of the Internet.
Yes, many dealers encouraged state regulators to battle TrueCar, which violated state laws designed to protect the interests of dealers and consumers. For instance, many states do not permit dealers to use the word "invoice" in advertising. But invoice prices are now widely published on the Internet.
The TrueCar drama revealed that state laws need to be reformed to reflect the new market realities. If we learned anything from the explosive growth of Wal-Mart, it is that consumers want the best price, even at the expense of small businesses in their markets.
Just look at how many small-town downtowns were devastated when Wal-Mart came in. That could be the dealers' future if they reject change now.