Is TrueCar a Rip-Off?

Car shopping can be fun, especially going on test drives. But haggling with a dealer can suck all the fun out of buying a new car. Plus, you might end up at the dealership for hours as the salesperson goes to talk to the manager over and over as you negotiate the price. However, you might not have to endure that painful process thanks to TrueCar.   

What is TrueCar?

A photo illustration of the TrueCar logo displayed on a smartphone
TrueCar logo | Rafael Henrique/SOPA Images/LightRocket via Getty Images

According to ConsumerAffairs, TrueCar partners with dealerships to provide car prices without any negotiation. TrueCar is an online site where you can buy new and used cars, and it offers you a guaranteed price aimed at being lower than the price you’d get at the dealership.

The service is completely free to use, with no membership fees or other hidden costs. TrueCar offers what it considers the “true” price of cars — basically the MSRP and any rebates or incentives.

TrueCar aggregates data from dealerships, loans, dealer marketing materials, registration information, and insurance data to calculate a fair price based on what other people have paid for similar vehicles.

After you find the car you want, TrueCar gives you a price certificate guaranteeing a fixed price at a participating dealership. This price also includes the destination fee and regional advertising fee. Sound too good to be true? Yeah, there’s a catch. Or two. 

Does it really work, or is TrueCar a scam?

While TrueCar is completely legitimate and not a scam, it does have a few caveats. First, the price they give you might not actually be the best deal. TrueCar does not provide any additional savings beyond what the dealership would offer, they simply take the haggling aspect out of the equation. Second, it is not as simple as printing the price certificate. You will have to enter personal information, which means that you will likely get calls and emails even after you have concluded your purchase. 

Third, and probably the biggest and most important caveat to be aware of, the price certificate does not guarantee that the car will be available when you go to the dealership to purchase it. While a participating dealership is required to honor the price certificate, it is not a reservation service. You are not technically buying the vehicle from TrueCar, they are more of a middleman. So, bottom line, the dealership is not required to hold the car for you.

How does the service make any money?

Because TrueCar doesn’t charge you a fee to use the service, it’s reasonable to wonder how it makes any money. It charges participating dealerships a fee for any vehicle sold through TrueCar, which is the primary way it makes money. The company also makes money through ads, consulting work, and data. 

If negotiating with a dealership is holding you back from buying a new car, TrueCar might help you clear that hurdle. It doesn’t cost you anything, and as long as you understand that the car you get a guaranteed price for might not be at the dealership when you get there, TrueCar offers you a decent way to walk in with a set price and not worry about dealing with finance and sales managers.

But remember, it might not be the best price for the vehicle you plan to buy. Doing research and knowing what price you want to pay will help streamline the process and is ultimately the best advice for buying a car.  

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