TrueCar Changes Billing Model to Stay Alive in Virginia

TrueCar announced Wednesday that they would be changing their billing practices in the state of Virginia away from the illegal per sale model to a subscription fee. Wonder if they plan to make the same move in Texas, Maryland and Louisiana where that practice is also illegal. From my days of launching cars.com's NewLeadsPlus in Texas, and other pay per lead generating products in those other states, UpShift Digital is well aware of the laws and the penalties. Interesting that TrueCar and Scott Painter didn't feel those laws related to him. Working the Texas lawmakers, we learned that it's not the dealer, but company providing the leads that can be at risk and the fine can grow to as much as $10,000 per lead generated. That could be a bit hefty. In Texas, this law was created in the early 70's, you know, when the Internet was just beginning (snicker) and created to protect the dealer base. You can tell from my attitude, I think the law is stupid and dated.

From my point of view, the billing model is not TrueCar's big problem. In actuality, unless the technology is deep in the dealer's "wheaties" (which we know it is) there's a risk on a pay per sale model. I have always felt that the pay per sale model makes the vendor retain all of the risk, while the dealer that wants to be less than honest about what affected the sale can get off without a fee. And let's be honest, a pay per sale model goes back to the competivie media model. I am sorry folks, your newspaper ad didn't sell that car anymore than your listing on cars.com did - ALONE. However, your media CAMPAIGN sold that vehicle and not being on TV, on cars.com, etc.  makes your campaign incomplete.

But i digress…

With TrueCar putting all their focus on changing their billing model it really takes one's eye off the real problem. How they get and receive their data to create the dealer vehicle pricing. When a relatively new company hits the streets, with a huge ad campaign, and still has states and major dealer groups banning their product, it certainly isn't the billing model that anyone is concerned about. If the product or project sells cars, then people will find a way to deal with it and be happy with it - UNTIL is starts screwing the bottom line - badly. And then the OEM's don't really care, because still get their bit. Then when THEY start banning the product? Ok, TrueCar you've really screwed the pooch…

Stay tuned to this page to see what happens next - I  am sure something will today or tomorrow.

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