AutoNation Inc. is severing ties with TrueCar Inc. following a protracted contract dispute centered on access to customer information.
AutoNation, the country’s largest new-car retailer, informed TrueCar executives that its dealerships would stop using the Internet vehicle shopping service at the end of July.
The split had been foreshadowed. In April 2014, AutoNation CEO Mike Jackson said the retailer planned to de-emphasize third-party lead providers such as TrueCar, AutoTrader.com and Cars.com, as it strengthened its own website and digital presence to build traffic and sales, but Jackson laid the blame for the break at TrueCar’s feet.
“TrueCar has made some onerous demands in its new contract negotiations with us that are unprecedented in my 45 years in business and are unconscionable and unacceptable,” Jackson told Automotive News. “We cannot agree to them.”
In contrast, Jackson said he has no intention of dropping other third-party providers at this time.
TrueCar founder and CEO Scott Painter portrayed the split as the result of philosophical differences.
“Our partnership with AutoNation just turned into, in a very real sense, a choice for the consumer,” TrueCar founder and CEO Scott Painter told Automotive News. “It really makes them our competition.”
Consumers who want “truth, transparency, an up-front price” will do business with TrueCar, he said, while those who want to buy cars in a traditional manner will go to AutoNation.
The biggest issue in the dispute: TrueCar demanded that AutoNation share all of the retailer’s customer information for all of its transactions, not just TrueCar-related deals, Jackson said.
That would mean turning over information covering a laundry list of 41 data points on the approximately 550,000 vehicles sold by AutoNation annually. Of those sales, AutoNation attributes just 3 percent, or about 16,500, to TrueCar.
“It’s none of their business,” said Jackson, adding that he will never give all of the company’s customer data to anyone.
Painter characterized the split differently, saying TrueCar gave AutoNation “a clear line in the sand” and demanded the retailer comply with its data-sharing terms, which he called “marketplace requirements we need to enforce.”
“This isn’t AutoNation dropping TrueCar,” Painter said. “This is a very deliberate step on our part. We went to them and said, ‘You must comply with the rules.’”
In fact, Painter said, TrueCar has “fired” more than “350 dealers” in the last 12 months for refusing to comply with the company’s terms.
Strictly an opinion of my own… I would NEVER do business with TrueCar knowing how they demand personal info, especially considering they don’t offer anything for sale to consumers. I also have an issue with dealers having to pay a fee for people TrueCar sends to them. Dealers pass that fee right on to the cost of the car, so ultimately it is the consumer who pays it.