Skip to content

Dealer Insights - July-August 2015 - Dealer Digest

Jun 23, 2015

Is TrueCar worthwhile for dealerships?

TrueCar was founded as an automotive buying website in 2008 to help car buyers get the best price without having to haggle with dealership salespeople. The website promises to bring more transparency to the car-buying process and prevent buyers from overpaying for a vehicle.

About 25% of all U.S. auto dealerships now use TrueCar to get leads, and TrueCar is a party in about 3% of all new vehicle sales. According to TrueCar, the average buyer using the service saves about an hour of time and $3,000 compared to buying a vehicle the traditional way.

Dealers pay a $299 fee for each new car and $399 for each used car sold via a TrueCar lead. So, is TrueCar a good way for dealerships to generate more leads? Answering this question goes beyond deciding whether or not you want to pay the TrueCar fee.

To sell a vehicle using TrueCar, you must bid against other dealerships in what is essentially a reverse blind auction. TrueCar implemented changes to the bidding process a few years ago — dealerships can no longer see each other's price offerings. Some say this has helped dealerships maintain higher profit margins on TrueCar vehicle sales.

The TrueCar model, already showing its influence on other third-party websites, could be the wave of the auto-selling future. This makes it something that dealerships may want to examine going forward.

Spouse definition changed for FMLA

The definition of a "spouse" has changed as it applies to the federal Family and Medical Leave Act (FMLA). Any eligible dealership employee who wants to take unpaid, job-protected leave to care for a spouse with a serious health condition may now claim this leave for a legal same-sex, common law or foreign-celebrated marriage.

Validity of a marriage for FMLA purposes is now based on the law where the marriage took place, not the law where the dealership is located or the employee resides. Consider revising your dealership's leave policies to reflect this new definition of a spouse under the FMLA and let your employees know about the change.

Auto sales forecast: Nearly 17 million

The upbeat U.S. economy appears to be having a positive impact on the automobile industry. Automakers are forecasting sales of 16.9 million new vehicles in 2015, just shy of the record 17.4 million vehicles sold in 2000, before the burst of the dot-com bubble and the 9/11 terrorist attacks. If the projections hold, 2015 will be the fifth consecutive year of rising auto sales.

Automotive Dealer Insights - July/August 2015

Contact EisnerAmper

If you have any questions, we'd like to hear from you.

Receive the latest business insights, analysis, and perspectives from EisnerAmper professionals.