TrueCar.com, the online vehicle shopping service, has stopped offering vehicle prices from dealers and promises of big discounts.
Instead, TrueCar shoppers now request price quotes from local dealers after they visit the TrueCar Web site.
The switch, along with other changes made last week, are a sea change for TrueCar, which had staked out a niche in online vehicle shopping by pitching big discounts.
Now TrueCar resembles its online shopping competitors such as Cars.com and Edmunds.com in the way it connects shoppers to dealers.
The changes come at a difficult time for TrueCar. It is losing dealerships and just agreed to pay $50 million a year for three years to be Yahoo.com's exclusive auto shopping partner.
Pressure for change came from two powerful sources.
Dealers, such as Richard Cvijanovich, a TrueCar client in Phoenix, said the emphasis on discounts eroded transaction prices and profits. TrueCar dealers with lowball prices "really skew the market for the rest of us who are trying to make a profit on the front and back ends and be fair with our clients," he said.
And regulators in many states 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.
"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 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."
As part of the changes last week, the company eliminated its "Best Local Price" feature. On its Web site, TrueCar 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.
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 does not operate in Alaska.
TrueCar said last week that it is also planning 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."