Truth about TrueCar and other websites like it
I was listening to my favorite radio station when TrueCar commercial came on and they were claiming to be consumer's best friend when it comes to buying a car. The ad said something like: We know what people paid for your car in your area so we will tell you the price you should pay, and so on...
Let me clarify how TrueCar, and other sites like it operate. When I managed a car dealership I would log into my TrueCar portal and set up pricing that I want to show shoppers on my vehicles, TrueCar would tell me if my price was great, good, or fair but ultimately the decision was mine and I priced cars in the way that would make sense for my dealership and my bottom line. TrueCar would get paid commission for each car we sold through them much like any of my salespeople that worked for me, in a way, TrueCar was a digital salesperson for my dealership.
As a consumer, ask yourself this question: Would you trust if your salesperson told you that you should pay this price because all of his/her other customers paid this price too? My guess is you probably wouldn't just accept that and pay the price presented to you. TrueCar is telling you the same thing, and since their revenue comes from the dealership, they are representing the interests of the dealership.
With all that said, there is a purpose that sites like TrueCar and Edmunds serve to educate consumers and I won't deny that the more educated you are the better. But you have to remember that there are multiple variables that determine how good of a deal you received, things like trade-in value, interest rate, extra warranties, accessories, paint protections etc. all play a major role but TrueCar only advises you on 1 of them. If you buy a car for a great price but you received a low trade-in price or paid too much on financing then you didn't get a good deal. In my experience, we have always gotten better pricing than these websites quote and we make sure that all the other variables are in your advantage as well. The main reason for that is we represent the Buyer and we will never accept compensation from the Dealer. When we negotiate on your behalf we go for the absolute lowest price (regardless of what the average price is), we get you the most for your trade-in, we make sure your financing or leasing terms are the best available.