Tag Archives: What Should I Pay for a New Car
Here is my honest review of TrueCar. They claim to promote transparency in car buying, but are they really interested in getting you the best deal? Well, the answer is “kinda”.
From a marketing perspective, TrueCar wants to attract car buyers to their service. To do this, they’ve put a lot of money into a slick website providing car reviews, pictures, and nice graphs to show you what others paid in your area.
But at the same time, they make their money from the car dealers who pay them for the personal information of car buyers… that’s you! Sounds like a conflict of interest to me. However, it isn’t all bad, you just need to understand how to use a service like this to get the best possible price.
Table of Contents
- What is TrueCar?
- My TrueCar Review
- Is it possible to beat TrueCar prices?
- Alternatives to TrueCar
Before you read any further let me tell you it is possible to beat TrueCar prices. Do not settle for their TruePrice. More on that later, but first…
What is TrueCar?
TrueCar is an automotive technology platform that connects car buyers with car dealers. In addition to the TrueCar website, they partner with brands like USAA, Sam’s Club, and Consumer Reports showing Powered by TrueCar on partner websites.
TrueCar also aggregates car buying statistics and reports on market car sale prices to both TrueCar dealers and customers.
Put simply, TrueCar is a lead broker for car dealers. They ask for your contact information to put you in touch with dealers in their network who pay TrueCar for the privilege of trying to sell you a car. You tell TrueCar the type of car you want, enter your phone and email, and they will give your information to 3 dealers who will send you competitive, but not necessarily the best, car prices.
Editors Note: you can reach more than 3 car dealers using other services like these.
How does TrueCar make money?
TrueCar makes money from car dealers who pay fees to be a part of the TrueCar network and obtain your personal information when you request car prices. These dealers pay a premium to have their dealership appear in the results as “TrueCar certified dealers” when you click the button to See TruePrice on Local Inventory.
Does TrueCar charge a fee?
TrueCar does not charge a fee to car buyers, only to car dealers. Although, if you accept TrueCar’s TruePrice without negotiating you are costing yourself money and inflating the dealer’s profit margin. More on that below.
Does TrueCar work for used cars?
TrueCar does have a used car offering, but it doesn’t work the same way as their new car service. Similar to AutoTempest, TrueCar has a used car search engine that lets you input search criteria and filter results to narrow down used cars in your area.
TrueCar’s business model for used cars is different than new cars because no two used cars are exactly the same. As a result, dealers cannot provide competing bids on just a type of car. Instead, they just must provide specific listings of what is in their inventory.
TrueCar itself is on the up and up, but that doesn’t mean all of its dealer partners are quite as ethical.
Read: Is TrueCar a scam?
Many dealers will offer a car deal when they don’t actually have that model in stock in order to get you to visit (i.e. the bait and switch). Another common scenario is they will provide a price that does not include all applicable fees for an unpleasant surprise at the dealership.
TrueCar Review – The Good & Bad
TrueCar Video Review & Walkthrough
Pros: Here’s what I like about TrueCar
- Their Price Report shows you the actual car cost (invoice price), average price paid, and what constitutes a good deal in a clever graph. This is similar to Edmunds True Market Value® which I explain in this review of Edmunds.
- They’ve got a decent mobile app that shows you pricing, reviews, and images. Both the app and the mobile version of the TrueCar website are both very similar. However, the TrueCar app also allows you to scan a window sticker while on a TrueCar Certified Dealer’s lot. But there are some negatives to this (see next section).
- TrueCar’s Price Report also includes a “flexibility score” of how much negotiating room a dealer has on that model.
Cons: Here’s what I don’t like about TrueCar
- They only put you in contact with three local dealers…which must be in their network. You can reach a wider variety of dealers using one of the alternatives to TrueCar below.
- TrueCar’s advice is to take your “Best Local Price” to the dealer (which is usually good), but to not bother negotiating the price any further. A TrueCar Price Report will certainly help you get a fair price, but by itself will not get you the best price.
- Dealers quote a price through TrueCar on a model, color, and options, but may pull a bait and switch scam and not actually have that configuration in stock.
- You can get a TrueCar guaranteed savings certificate, but it will not include all the extras they will try to sell you at the dealership. Expect both the car salesman and the finance department to offer you various add-ons like tech systems and extended warranties that could significantly increase your total.
- TrueCar’s mobile app allows you to scan a window sticker while on a TrueCar Certified Dealer’s lot. However, you are required to create an account and sign in to use this feature so you must provide your personal contact details. Plus if you are not at a TrueCar Certified Dealer you can’t use this. And because other dealers may take a day or so to respond to you with competitive prices, I suggest not using this feature. Instead, get all your pricing lined up BEFORE you actually visit a dealership.
- TrueCar doesn’t help you find the best car financing or get the most trade in value for a car which are huge aspects of a car purchase and can cost you a lot of money if not handled properly. But then again, you’re on your own for these items when using any car price service, so I can’t fault TrueCar too much for leaving them out.
Is it possible to beat TrueCar prices?
According to the New York Times, a nonprofit consumer group found that the TrueCar guaranteed price averaged $1,550 more than what consumers paid when dealers independently bid for their business.
So the answer is clearly, yes, you can beat TrueCar prices.
Deals promoted on the TrueCar website only scratch the surface of the best car deals available. If you want the best price, the one thing you must do is contact more than 3 dealers. You can use other services to get in touch with more dealers and then negotiate to beat TrueCar prices. Here are some tips:
- TrueCar only puts you in touch with 3 local dealers and I suggest contacting 6-8 to get truly competitive pricing.
- If you get to the dealership and they do not have the exact configuration you were quoted, don’t get sucked into paying a higher price. Before you go to the dealership, make sure the dealer provides you with a specific VIN number, price, and list of options. If they try to add options and increase the price, consider checking with other dealers for what you want.
- Don’t forget that a good car price is only half the battle. Once you get to the dealership be prepare to negotiate car financing and the price of your trade-in as well.
Alternatives to TrueCar
There are many alternatives to TrueCar that provide a similar service and connect you with more than just 3 dealers from TrueCar. It’s easy to find many local dealers by combining several car price websites or entering nearby zip codes to expand your search.
My two favorites alternatives are:
- Find The Best Car Price…yup, that’s the website you’re on right now. You can choose a make and model at the top of your screen and I’ll connect you with up to 5 dealers at once. AND you can enter multiple searches for nearby zip codes to reach more dealers (I work with the largest network of dealers). Like TrueCar, dealerships pay me a small commission for referrals, but it costs you nothing to use my website. And if you read my new car buying guide I’ll teach you how to negotiate with dealers for the best possible price.
- Edmunds will connect you with up to 5 dealers at once Edmunds also provides a True Market Value for new cars which is similar to the TrueCar TruePrice but doesn’t require you to provide your personal information to see it.