TrueCar 2.0 says shoppers will like revamped format
David Barkholz is a reporter for Automotive News.
The remainder of 2013 should answer the question whether car shoppers accept the rebooted TrueCar as readily as dealers have.
Gone is the old TrueCar of a year ago, which offered cutthroat vehicle pricing to online car buyers. The low prices were generated by participating dealers who bid against one another in a reverse auction that allowed each to see the next lowest bid of a rival.
It was an unsustainable model that put TrueCar deals among the lowest 6 percent of new-car transaction prices nationally.
In addition, state regulators came down on the company over brokering and advertising laws that generally went unenforced for years against TrueCar until dealers howled.
A new kinder, gentler TrueCar has emerged in its place. But will consumers who liked the simplicity of TrueCar's pricing model warm to a fair, low-haggle deal?
TrueCar executive Larry Dominique says emphatically yes.
Interviewed last week in Detroit, Dominique said shoppers are returning to the TrueCar.com Web site. Unique visitors in December hit 1.5 million, vs. about 1 million per month through most of the second half of the year as TrueCar started talking about the changes it had made to its business model.
TrueCar CEO Scott Painter said late last year that vehicle prices negotiated via TrueCar still ranged in the lowest 25 to 30 percent of transactions nationally. So TrueCar contends that consumers still are getting good deals.
What has really changed is the shopping network's relationship with its participating dealers. Most are back from before the 2012 meltdown, when participating franchises fell to 3,160.
Dominique said 5,400 franchises now participate, only a couple of hundred below the late 2011 high-water mark. That's because of close rates that dealers get with TrueCar customers, he said.
One in four customers who come to a dealer via TrueCar buy a vehicle, Dominique said. He said TrueCar shoppers tend to be at the transaction stage of the buying process, not the research part.
With a full complement of dealers back on board and Web site visits growing, 2013 will be a reliable indicator if consumers like the new TrueCar as much as the old.
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