SANTA MONICA, Calif. -

After gathering significant input from its National Dealer Council, TrueCar on Tuesday unveiled what site officials are calling the TrueCar Curve, a tool aimed at providing both dealers and consumers with a more accurate, truthful view of transaction data.

TrueCar explained that its new formula does away with “dealer cost” and replaces it with data representing actual transaction pricing that is meant to allow consumers to compare what others are paying for similar vehicles in their area.

Site officials believe their new curve can provide the most comprehensive, accurate guidance in the industry, enabling users to make well-informed purchase and selling decisions.

The new curve was evolved from a direct collaboration between TrueCar and its National Dealer Council, a team of retailing experts from around the country.
Other major steps forward include an advanced dealer portal and consumer opt-in/registration features.

“The new curve is demonstrative of progress TrueCar has made throughout its business in an effort to provide the most accurate platform for consumers and dealers alike,” officials declared.

The site went on to highlight a series of elements it used to create the TrueCar Curve, including:

Below Market Range

The Below Market Range reflects the lowest 15 percent of all recorded sales transactions in an area. Officials said Below Market prices frequently reflect special vehicle sale situations, including inventory that has aged for long periods of time, less popular color combinations, demonstration vehicles, etc.

These transactions can also include instances in which a dealer sold a vehicle at an exceptionally low price, potentially at a loss.

Because the Below Market range only includes the lowest 15 percent of all recorded transaction prices, TrueCar said the prices in this range generally represent an outstanding deal for the buyer.

Great Price Range

The Great Price Range reflects recorded transaction prices in an area that fall just below the Average Paid price but above the Below Market price range. The site said vehicles being sold in this range generally represent great deals for buyers.

Good Price Range

The Good Price range reflects recorded transaction prices in an area at or above the Average Paid price but below the Above Market price range. Vehicles being sold in this range generally represent good deals for buyers.

Above Market Range

The Above Market price range reflects the highest 30 percent of all recorded sales transactions in an area. Above Market prices may result from limited local supply and/or high market demand for the selected vehicle. Transactions occurring at Above Market prices may also include instances in which a buyer was not adequately informed about what people were paying in his or her area.

Average Paid

The Average Paid is a proprietary mathematical calculation based on actual recent transactions in and area. It provides a statistically accurate understanding of what other buyers are paying for the vehicle selected and configures it.

Officials noted adjustments to the calculation beyond make, model and trim are normalized based on detailed, anonymized transaction information. This accounts for the fact that most or all recently sold vehicles included different option combinations than your specified vehicle configuration.

TrueCar said the data underlying the Average Paid calculation are filtered for extreme outliers and subjected to a weighted averaging process that considers factors such as the recency of transactions and the timing of data lags. In certain instances, the calculated result is adjusted to take account of abrupt changes in the market that may not yet be fully reflected by recent transaction prices.

In all cases where the Average Paid is shown, TrueCar pointed out there is sufficient sample size and transaction detail to be statistically reliable.

Factory Invoice

Officials indicated Factory Invoice is the amount that a manufacturer initially charges the dealer for a vehicle, including destination fees, regional ad fees and other fees charged to the dealer by the manufacturer. This price does not include discounts, dealer incentives, or holdbacks (money allocated back to the dealer from the manufacturer upon sale).

MSRP

The Manufacturer’s Suggested Retail Price, sometimes known as the sticker price, is the retail price suggested by the manufacturer and includes destination fees. Because the price is a suggestion from the manufacturer, a dealer can choose to sell a vehicle above or below the MSRP. The site believes many vehicles are sold below MSRP.