TrueCar began in 2008 as a website that gives auto shoppers dealership vehicle inventory pricing information and then refers them as sales leads to dealer clients.
Lead referrals remain a core of its business, but TrueCar now is getting deeper into digital. It is testing a platform that would allow a car shopper to do virtually an entire deal online on the TrueCar website.
The dealership essentially would become “a high-quality fulfillment center,” says TrueCar CEO and President Mike Darrow (pictured, below left), an auto industry veteran whose resume includes sales and marketing stints at Chrysler and Nissan.
In a WardsAuto interview, he discusses TrueCar’s impending initiative. Here’s an edited version of the Q&A.
WardsAuto: This is something different for TrueCar, right?
Darrow: We are making a pivot. We started as a lead generator with shoppers coming onto our site where we connect them to a vehicle, collect some information about them and then send them off to a dealer who would pick up the transaction.
Consumers now tell us that, aside from automotive, they are surrounded by digital marketplaces. Amazon is the one everyone points to. We want to bring something like that to automotive.
WardsAuto: Aren’t you doing that now?
Darrow: We want to enable the consumer to go completely end-to-end in the TrueCar environment, and then buy a car from one of our dealers.
We launched a test for that in the Florida market. A half a dozen franchised dealers are participating. We plan to continue testing through the end of this quarter. And then in Q1, we’ll do a market rollout in Florida.
We describe it as discover-to-delivery.
WardsAuto: Not to mention another company, but isn’t Roadster doing that now?
Darrow: Roadster’s a great product. But it is an application that appears on dealer websites. We are creating a marketplace application. The difference is that consumers can shop millions of new and used vehicles in this environment vs. going to a dealer website and seeing only that dealer’s inventory.
WardsAuto: What’s this new offering called?
Darrow: TrueCar+. We will still have our TrueCar core existing business. The name TrueCar+ signals to consumers there’s also a digital retailing experience providing an end-to-end transaction right on our site. It would be a separate path.
WardsAuto: Sounds ambitious.
Darrow: Yes. We’ve been working on this for two-and-a-half, three years. We invested in (acquired) a digital company called DealerScience, which has a desking tool developed by a third-generation Honda dealer. Consumers can calculate real payments on our site, not on a hokey calculator where you kind of get close.
We have an investment with a company called Accu-Trade, which helps us put a guaranteed cash value on a consumer’s trade-in.
We have transactional pricing information from our dealers. We’ve got a partnership with a company called AutoFi. They’ve built capabilities so the consumer can fill out a credit application on our site. The application is sent to lenders. Rather than a dealer getting a yea-or-nay decision on the loan request, that will go directly to the consumer.
WardsAuto: Because a customer picks out a car, and that car is at a particular dealer, that’s how the deal goes to that dealer?
Darrow: Exactly. Although the deal is happening on TrueCar, it really is happening around the deal parameters the dealer sets. That includes pricing and F&I product markups. It’s got everything represented at the dealer level. It’s as if you were in the showroom.
WardsAuto: What has been the dealer reaction to this?
Darrow: It’s been good. We’ve gotten two reactions.
You get an immediate acceptance from the national big-footprint dealers who see this as an adjunct to their digital processes.
We’re also talking to (smaller) dealers who lack the resources to build out their own digital environment. They see us as an opportunity to compete digitally without making a huge investment on their own.
WardsAuto: During the height of COVID, auto consumers used digital retailing because at one lockdown point in some states they couldn’t even get into a dealership. Are you betting digital auto retailing will keep that momentum going forward?
Darrow: Yes. The consumers’ vote for and experience with digital will continue to drive this. Ultimately, your transaction with the dealer will become an exchange of keys, the trade-in’s for the newly purchased vehicle’s.
I have a son who is a junior at UCLA. I watch how he consumes products online. He knows how long I’ve been in the auto business. He asked me, “Dad, tell me what dealers do again?” because when he buys a car, he wants to do it online.
WardsAuto: What do you tell him?
Darrow: I say automotive is a little behind digitally, but we’re working on it. These generations who have grown up consuming everything online are going to be the ones who drive these products. The pieces are coming together as we speak.
Steve Finlay is a retired WardsAuto senior editor. He can be reached at [email protected].