The car industry is one of the few industries in the U.S. where haggling at the consumer level on common. When in other countries it’s common to haggle for pricing. That’s just business. But in the U.S., we’re used to being given a price and deciding whether to buy or not. The car industry is unique because almost nobody pays MSRP for a car. MSRP is usually considered the “starting” point. Even though consumers have become more educated in the different pricing schemes used by automakers, consumers often still pay more than necessary. This is where TrueCar comes in. Now, this isn’t a complete TrueCar review since I haven’t used it to purchase a car yet, but I’ve used it for information purposes and if I ever purchase a new car I’ll definitely use it.
TrueCar is quickly becoming the authority in the car industry when it comes to transparent pricing on new cars. TrueCar aims to level the playing field when it comes to negotiating car prices by ensuring both sides of the transaction have access to all information. This is great for consumers, but TrueCar also serves Dealers. TrueCar partners with dealers to give them real-time, accurate information about the market and competitors, so they can adjust their business accordingly and increase marketshare.
So, you’re probably wondering what TrueCar can do for you. Well, there’s two major services that TrueCar provides. The first of these is its pricing information. Let’s say I’m looking to buy a 2011 Ford Focus. So I go to Truecar and find the Ford Focus page. Now, prepared to be giddy. When I first found this website I was ecstatic. So, if you click on the “Details” tab you can see a great pricing chart that shows you what the dealer really paid for that 2011 Ford Focus:
As you can see, the dealer cost is much less than the “invoice” price. You can often find this info elsewhere on the internet, but I think TrueCar makes it really easy to find and it’s all compiled for you. I think TrueCar’s benefit really starts to shine though when you use its compiled data.
TrueCar also provides the above pricing information based on its dealer sources. The above chart uses 53,347 transactions from the past 6 months. TrueCar uses all of this info to construct an average price, as well as standard deviations.
Remember earlier when I mentioned that TrueCar partners with dealerships to collect information? It also partners with them to sell cars. It obtains “no haggle” prices by partnering with local dealerships. You configure the car as you want, and then you get a price guarantee. You can walk into the dealer and they’ll sell you the car for that price with no negotiations. No need to waste time. They’ve figured out the minimum they can sell the car for and be happy, and that’s the price you get. The dealer saves by not having to pay their salesman commissions for all that time he spent to sell you on a car. It’s really a win-win in this situation.
It would be really awesome to see something like this for used cars, but I think there would be issues because all used cars are definitely not the same. However, TrueCar says that they’re currently working on a beta for new cars. I’m definitely eager to check TrueCar Used Cars when it’s available.
What about you? Have you used TrueCar or another similar service to buy a car? What was your experience like? If you haven’t used it before, do you think you’ll consider it now?