TrueCar inks partner deal with Sam's Club
LOS ANGELES -- TrueCar gained a key ally today with the announcement that it will partner with Sam’s Club to offer members access to a new-car buying program.
The Auto Buying Program will allow Sam’s Club -- a membership-only warehouse division of Wal-Mart Stores Inc. -- to offer targeted savings through TrueCar on specific brands, as well as potential savings on future service and repairs.
“We’ve chosen to launch our auto buying program with TrueCar based on their proven ability to bring car buyers a best-in-class experience,” Seong Ohm, senior vice president of merchandise business services at Sam’s Club said in a statement today.
The partnership aims to compete with a similar dealership referral service available through Costco -- one that company says led to just under 400,000 new and used car sales in 2014 alone.
Similar to TrueCar’s affiliation with USAA, the U.S. military financial services giant, members of Sam’s Club’s 653 clubs in the U.S. and Puerto Rico will have access to TrueCar’s 9,300 dealer partners across the country (TrueCar counts each new-car franchise individually, so a single Ford-Lincoln store would count as two dealerships).
In addition to TrueCar’s claim of an average of $3,000 in savings off sticker price, at least 12 automakers will offer Sam’s Club members specific incentives, though TrueCar declined to specify which automakers offered such discounts or how often. Also, the program offers deductible reimbursement of up to $500 twice a year if the vehicle is involved in an accident and needs service.
Used-car buyers will get three days to return their new purchase and all buyers may get up to $2,000 in reimbursement for repairs.
While the pairing gives Sam’s Club a crucial answer to Costco’s successful program, it also broadens TrueCar’s reach. Its partnership with USAA -- which owns an 18 percent stake in TrueCar -- has been described as “absolutely crucial” to TrueCar’s business model by a former executive.
Many dealers who use TrueCar -- especially those located near military bases -- have cited its relationship with USAA as the reason for using the online car-buying service.
2015 has been a rocky road for TrueCar. Scott Painter, the company’s founder and CEO, plans to step down by the end of the year as the company wrestles with several challenges. It has seen a sharply declining stock price, a nasty split from AutoNation, several dealer lawsuits and lower-than-expected retail earnings.
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