TrueCar at it Again!

[Jerry Thibeau]

http://www.autonews.com/article/201...hip-that-failed-financing-goals#axzz2ivbVc1U9

Does anyone else see the injustice here?

Customer submits a lead on TrueCar and is then directed to a Honda dealership to buy a car. Customer decides to buy a $22,000 Honda Civic and is offered the following finance options:

A. USAA - 1.99% for 60 months
B. Honda Finance - .9% for 60 months
C. Or they choose the low rate lease plan

Obviously the customer should choose option B or C since it's less expensive. So because the dealer is doing what's right for the customer, they should be kicked out of the TrueCar program? TrueCar is supposed to be helping the consumer get a better deal, but in this case they are looking for ways to maximize all profit outlets at the expense of the customer. Not to mention at the expense of military personnel. If the FTC should investigate anything, it should be the relationship between TrueCar and USAA!

This company is one of the worst choices a dealer can make and they need to be run out of our industry! Send you cancellation notices folks! Time we rid the industry of these scumbags!

 

[Jerry Thibeau]

I just wrote 60 minutes an e-mail and suggested they take a look at a news story opportunity here.

 

[hondadealer1]

I’m also a Honda Dealer who is signed up with Truecar.
We get a good share of USAA customers at the dealership, and we run into a similar problem. American Honda Finance Corp is offering 0.9% apr for 60 months on most of 2013 models which is lower than USAA 1.39% apr. That promotional rate from Honda is being advertised all over tv, radio, and internet and it is hard to tell every USAA member that they don’t qualify.
But that is only a small part of the issue. AHFC is also offering $500 active duty military incentive when the vehicle is financed through AHFC. Basically, we are being asked by Truecar to tell Mr. Customer, who’s serving our country, that he does not qualify for $500 active duty military discount because Truecar and USAA are looking to capture his financing and profit from the transaction.
AHFC is also offering $500 College Grad discount and $500 Honda Civic loyalty/conquest discount that puts us in the same situation.
On top of that American Honda allocates a pool of Flexcash funds to each dealer on the monthly basis (total amount is based on previous months sales). Each dealer can apply from $500 to $1000 (based on the vehicle) from the pool to any transaction when the customer finances through AHFC. This is an extra discount that is being recorded as a part of the down payment on the contract. Customers that finance through other banks including USAA can potentially miss out on up to $2000 in additional discounts.
Not only are USAA and Truecar making USAA members pay higher APRs, but they are also taking away thousands of dollars in additional discounts that would otherwise be available to them.

 

[Jlewis74]

Wow just wow, do True Car thinks their policy should out weigh that of the captive lender? Also when the dealer uses USAA I am guess that hurts their finance penetration % also. This could all be fixed if Dealers would take control, but then again they might be scared that the Govt will come after them.

 

[kevinfrye]

Hmmm, so when I go to the TRUECar website, the front photo says "Never Overpay", but they are forcing buyers to overpay by using TrueCar instead of the better deals offered by Honda???

 

[Alex Snyder]

Under a contract between TrueCar and the store, USAA members who are pre-approved for car loans with USAA are not even supposed to be presented with competing financing offers.

TrueCar wants 46 percent of USAA members who buy a vehicle at Honda of Annapolis with a USAA loan approval to finance through USAA, Pilajevs said. But the store was financing less than 20 percent of those customers through USAA, he said.

Can anyone confirm whether this kind of language is in the TrueCar contract?

 

[hondadealer1]

 

[Alex Snyder]

Thanks! Is there anything about maintaining a USAA pre-approved loan percentage? Something like the Automotive News article refers to with Honda of Annapolis maintaining a 46% average?

I'm wondering if this a contractual obligation shared amongst the dealer body or some sort of third strike scenario TrueCar gave as an ultimatum to Honda of Annapolis.

 

[yagoparamo]

Traditionally a vendor would put inventory on someone's website and get paid a percentage of the money the leads created. TC may be pocketing all the money from creating the leads and having a "preferred" vendor relationship with the website owner (USAA in this case). If this is the case the model is great for TC but not for the dealer's back end profit or the customer that could get a better finance offer.

 

[jpalermo]

I just had my hand slapped by TC for telling a customer he could save an extra thousand by financing it with IFS instead of BCU. Customer called BCU and reamed them a new one, which in turn I got a call from TC. Next complaint... I'm out.