TrueCar, Inc. Releases First Online Automotive Buying Behavior Study
Results Show Consumers Prefer Upfront and Transparent Pricing by a Wide Margin
SANTA MONICA, Calif., Feb. 28, 2011 /PRNewswire/ -- A new study done by TrueCar, Inc. -- the authority in new car pricing, trends and forecasting -- has determined that consumers prefer knowing the true price paid by others purchasing the same type of car in the last 30 days. Conducted in October 2010, the study also revealed that people are mostly unaware of what dealers actually make on the sale of a new or used vehicle.
"The goal of this study was to find out more about consumers' mindset when it comes to buying a car," said Scott Painter, Founder and CEO of TrueCar. "What we've learned is consumers really want to feel they can trust the dealer to be fair. And the only way to achieve that is through transparency and upfront pricing."
TrueCar's Online Automotive Buying Behavior Report, which was conducted by Synovate and polled 1,000 adult consumers on a number of topics related to new and used car buying behavior and perceptions, determined transparency in the buying process is the consumer's top priority. It also showed that the largest disparity between reality and consumer belief was how much profit consumers believe a dealer makes and deserves on the sale of a new car.
When asked "how much do you think a dealer makes as profit on the sale of a $40,000 vehicle," 55 percent of respondents answered $4,000 or greater (a profit of 10 percent or more). In response to how much they think is fair, 53 percent said between $1,000 and $3,000, with the average being $1,800 (4.5 percent profit). In reality, a dealer makes between one and three percent profit on each new car sold.
Some key survey points learned by TrueCar are:
- 85 percent of new car shoppers believe that knowing what someone else paid for the same car within the last 30 days would be helpful in their buying process
- When choosing a dealership to purchase a new car, the two most important factors are price (78 percent) and trust (70 percent). At the bottom of that list is the dealer's professional staff (9 percent)
- 52 percent of shoppers would drive 30 minutes to an hour to achieve a guaranteed savings of $2,300
- More than 90 percent of in-market new car buyers believe it would be valuable to require a dealer to provide a no-haggle upfront selling price
- 82 percent of car shoppers believe that they will not receive a fair price for their trade-in OR the dealer will make up for the loss through other services (financing, extended warranties, etc.)
- 80 percent of respondents would likely use a car buying service from a trusted organization to save time and money
According to Painter, "We believe this study, which we plan to conduct annually, illuminates the way in which the market is headed and how cars must be sold in the future. We hope others in the automotive industry will see this data and understand what consumers desire and adjust business practices accordingly."
Editor's Note: Full report can be viewed at www.truecar.com.
About TrueCar, Inc.
TrueCar Inc. is an automotive solutions provider focused on changing how cars are sold by providing a significantly better customer experience while helping qualified dealer partners to gain incremental market share and reduce costs. TrueCar.com is a transparent, visual publisher of new car transaction data. TrueCar.com price reports help both dealers and consumers to agree on the parameters of a fair deal by providing an accurate, comprehensive and simple understanding of what others actually paid for the identically equipped new car over the last 30 days both locally and nationally. TrueCar, Inc. works with a national network of nearly 5,000 Certified Dealers that provide up-front, no-haggle, competitive pricing to assist some of the nation's largest and most well respected membership and service organizations to meet the auto buying needs of their members and customers. These partnerships include American Express, Consumer Reports, AAA, USAA and more than 60 others. Collectively these audiences represent over 1M in-market customers each month. TrueCar, Inc. is headquartered in Santa Monica, CA and has offices in San Francisco. The company was founded in 2005 and has been profitable since 2009. With nearly 200% year over year growth TrueCar has driven over 200,000 sales and is developing a suite of transaction oriented products and services centered on transparency and radical clarity as a result of comprehensively analyzing market data and information.
About TrueCar Data
TrueCar obtains data directly from numerous sources including automotive dealers, technology companies, data aggregators, and analytics companies within the automotive space. We also acquire vehicle configuration data, customer and dealer incentives data, financing and loan data, vehicle registration and insurance data, and much, much more. TrueCar is insatiable about data with our goal to find 100% of all purchase transactions, even if that means finding the same transaction multiple times from multiple sources within the car-buying ecosystem. Our data is among the most timely and comprehensive in the industry, as we are able to process most car sales within a week of the actual sales date, and have a substantial fraction on the site within 48 hours of the actual sale. TrueCar believes the greater our informational accuracy, the greater benefit we provide to both dealers and consumers.
This press release and the information contained herein is for noncommercial use on "as-is, as available" basis and may be used for informational purposes only. TrueCar makes no representations or warranties, express or implied, with respect to the information contained in this press release and the results of the use of such information, including but not limited to implied warranty of merchantability, fitness for a particular purpose and non-infringement. The information contained in this press release may include technical inaccuracies or typographical errors. Neither TrueCar nor any of its parents, subsidiaries, affiliates or respective partners, officers, or directors, employees or agents shall be held liable for any damages, whether direct, incidental, indirect, special or consequential, including without limitation lost revenues or lost profits, arising from or in connection with your use or reliance on the information presented in this press release.
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SOURCE TrueCar, Inc.
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