TrueCar.com, the online vehicle shopping service, has stopped offering vehicle prices from dealers and promising big discounts.
TrueCar shoppers now request price quotes from local dealers after they visit the TrueCar Web site. TrueCar also eliminated its "Best Local Price" feature. The TrueCar site had promoted the lowest price for a car offered by a TrueCar dealer in the shopper's market as the "Best Local Price."
Now the TrueCar site refers to a "Target Price," a phrase that significantly downplays the promise of a low price for shoppers. TrueCar says the Target Price is an estimate of what consumers can expect to pay for the vehicle they're researching.
Regulators in many states have said TrueCar's methods violated various laws designed to protect the interests of dealers and consumers. In many states, that will affect not only the way TrueCar presents pricing information to shoppers, but also the way it charges its dealer clients.
TrueCar also has been the source of mushrooming angst from dealers who say the service erodes transaction prices and margins.
"By removing dealer-provided pricing altogether, TrueCar is providing market information, not a dealer's specific pricing, and is not advertising on behalf of the dealer," TrueCar said in a statement issued to Automotive News. "TrueCar is in no way involved in arranging or negotiating a sale or procuring a vehicle, addressing potential brokering concerns in many states as well."
With the changes, TrueCar said its service is "all clear" and legal in 36 states. The company said it has taken "necessary steps" to be compliant in the 14 other states in which it does business, and awaits regulatory approval of its changes. TrueCar called the changes temporary, saying it is also plans a reworked Web site that will still emphasize savings for consumers. The company provided no details but said the reworked site will be "fully compliant from a regulatory perspective."