SANTA MONICA, Calif. -

On the heels of adjusting its model to flat-fee billing in Virginia and suspending operations in other states, TrueCar announced “proactive” changes on Monday to ensure compliance with state laws and emphasize “its commitment to state regulators, state dealer associations and to better serve its dealer partners.”

TrueCar’s changes include creating a new billing model in certain states, adjusting advertising on the website, launching the TrueCar National Dealer Council and rolling out a new consumer membership program.

These changes are in conjunction with what TrueCar called a “listening tour,” where senior executives with the company have been meeting with organizations such as dealer groups, dealer associations and manufacturers.

“These meetings have been incredibly constructive. We are in the business of innovation. As such we have to embrace change as part of what we do,” shared Scott Painter, the company’s founder and chief executive officer.

“The feedback we have received, both good and bad, will enable us to better serve our dealer partners, and the industry overall,” he continued. “The changes announced in Virginia are a great signal that collaboration with state regulators can result in a constructive outcome for consumers and dealers.”

The company said it has been in talks with several states about fee structure and/or advertising issues and emphasized that it “responding immediately to any state concerns as part of a comprehensive national strategy, with a goal of achieving 100 percent national compliance.”

For the time being, TrueCar has temporarily halted operating in Colorado, Louisiana, Nebraska and Oklahoma.

Officials contend that the company is doing this so that it can make necessary improvements and protect dealer members. TrueCar plans to reveal “certain changes” sometime this month.

“TrueCar’s dealer partners are central to our success and ensuring compliance is the foundation of TrueCar’s strategic commitment to dealers,” shared Stewart Easterby, executive vice president of TrueCar. “We will not put our dealer partners in jeopardy.”

The company then went on to break down its changes in more detail, beginning with the new billing model.

Subscription Model

With bird-dogging or brokering laws existing in most states, TrueCar has decided to move to a subscription-based billing model instead of performance based billing for any state where such a legal conflict may arise.

Of course, TrueCar made this change in Virginia last week and gave the example of its plans to do so voluntarily in California.

As for its long-term goals, TrueCar plans to continue its collaboration with state regulations to figure out how existing laws can be modified to adjust for what is now possible given the advancements of the digital world.

DMS Data Practices

Moving along, TrueCar delved into what has been a hotly debated topic within the industry: its practices when it comes to dealer management systems.

Regarding this topic, the company had this to say: “TrueCar is committed to maintaining the highest data standards including limiting the collection of information. TrueCar does not sell dealer DMS data and does not use dealer DMS data for any purpose other than matching vehicle sales to customer leads and monitoring performance to enhance TrueCar’s service to its dealer partners.”

Officials added: “In addition to only collecting information with dealers’ permission, TrueCar is committed to working with dealers to enhance dealers’ control over access to and use of DMS data, including limiting the fields of data that are received from DMS to those fields necessary to perform the sales matching function.”

Advertising Changes

Next up were the adjustments planned for  the company’s advertising on TrueCar.com. Basically, what TrueCar says it will do is to emphasize dealer attributes like proximity, selection and service instead of just focusing on who has the lowest price.

“Bottom line is we’re out listening and talking to the industry. What we heard is that dealers feel our ads focused on price and did not tell a positive enough story about our dealer partners,” said TrueCar president Stephen Hansen. “We’ve listened to their concerns and are making adjustments. Qualitative considerations that drive purchase other than price will have greater prominence in future ads.”

Dealer Council, Dealer Initiatives

As for some of the dealer-specific changes, TrueCar is planning to unveil its National Dealer Council in the coming weeks as a means to generate feedback from dealers.

Additionally, the company plans to identify dealers who have “extreme price outliers” that may throw off the equilibrium in the dealer-consumer dynamic.

The company also is making improvements to the TrueCar Price Report to show “a much more balanced view of the market,” which it contends can help dealers market themselves more effectively.

Moreover, TrueCar said there are various overall product, policy and process changes in store to help foster greater dealer confidence.

Consumer Membership Program

Lastly, TrueCar shared how it plans to promote both stronger quality of leads for dealers and the protection of automakers’ brands.

Taking feedback from automakers, the company said it is rolling out a new consumer membership program designed to “substantially alleviate the concern.”
“With this change, dealer partners can expect even higher quality introductions from TrueCar. In the end, consumers and dealers benefit,” officials concluded.