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TrueCar Reviewed: We Bought a New Car

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I may have teased it a few times in the last couple of weeks, but we bought a new car. The Jeep with 125,000 has had enough problems that we no longer feel we can depend on it. I might feel differently if it was just me, but with one young child, and another on the way, we have to a premium on reliability. I saw this day coming and back in August picked the best luxury SUV for us. That luxury SUV was an Acura MDX. Why a luxury SUV for this frugal guy? Well, it would be the wife's car and she's earned a luxury car for the first time in her life. I also subscribe to the Clark Howard school of personal finance... you can have the frugal car and let the wife have luxury one.

As far as luxury SUVs (with 3 rows) go, the MDX is one of more reasonably priced ones in the low $40Ks. The category has a lot more than 70K SUVs in it than I thought. After having driven the Acura MDX for a couple of weeks now, I have to say that it is an extremely awesome car. That's subjective and certainly related to my previous experience. If you drive complete junk, any new car will seem incredible, right?

We were under a time-crunch to buy the new car, we need two cars to function. The planning we did back in August really paid off as we didn't need to test drive multiple cars. We coud just jump right into the negotiations.

I've been reading a lot about the TrueCar buying service and decided to give a try. It works a little like LendingTree if you are familiar with them. You put out a request for a car, mark off some dealers in your area and they come back with quotes. TrueCar's website gives you a great idea of what price to expect before you even place the request. In my experience it is very favorable price in comparison to just going to dealer and negotiating yourself.

Here's how it went down for me. The base Acura MDX with all-wheel drive (must have for New England snow) has a MSRP of $45,185. TrueCar's website estimated that they could save me $1,926 of that and for an Estimated Dealer Price of $43,259. When I went to a dealership in August, they said they had no flexibility on that MSRP because it is a newly designed model and in great demand. It could have been typical dealer BS, but that's what they told us.

My feeling is that it couldn't hurt to get the TrueCar quotes and... worst case scenario use them as leverage in negotiations with non-TrueCar dealerships. A dealership can't stick to its guns on a MSRP of $45,185 when I've got quotes around $43,259, right?

There were three TrueCar dealerships in my "area"... Boston, Connecticut, and New Hampshire. As you can tell they have a fairly wide area. The first quote came in at $43,544 and the second quote came in at $43,038. That $43,038 was pretty exciting to us. I like the idea of getting $2000 off of MSRP without having to actually negotiate for it. A day later the last quote came in... $41,998! I should mention that all quotes were our preferred color, they didn't bait and switch us with that.

Obviously, we went with the dealer that offered us the $41,998 price, which is lower than the factory invoice price $42,211 according to TrueCar. (Though Edmunds says that the factory invoice is $41,911.) It seems like a great deal by any measure.

The dealer did add a $399 destination charge, but I think they all would have done that? I don't know. In any case, it was still a very fair price considering the amount of work I put in to negotiate it... zero.

TrueCar itself has a few whitelabel sites. For example, Consumer Reports has a car buying service and while it looks like they built it themselves, it really is just TrueCar behind the scenes. My favorite bank, USAA, also has a car buying service that uses TrueCar as the back-end. USAA was offering a 0.64% discount on their already great financing for using the TrueCar service. The end result is that we got a 60-month loan at a 1.35% interest rate. That's not too shabby, right? Imagine what it could have been if I paid MSRP and used the dealer financing... yikes!

As we were completing the paperwork on the deal, I asked the salesman what he thinks of the TrueCar service from a dealership perspective. He said (paraphrased), "Quite honestly, it's not that good of a deal for us. The prices are very low and we have to pay TrueCar for each car we sell. I don't know how long we'll continue to be a part of it." I suspect that the draw is to bring in customers like our family, who went in and bought a car very quickly. We normally wouldn't have driven to that dealership, so that's increased volume. However, I can see how they'd lose money from the locals who would use the dealership anyway, but get the TrueCar quotes to save themselves a grand or two.

I'm not going to feel sorry for the dealer. In the end, it's their choice and they can quote whatever prices they want. Instead, I'm just going to enjoy the good price and hope that TrueCar is around in 12 years when we'll probably be looking for a new car again.

Do you have any experience using the TrueCar buying service? Let me know in the comments.

Last updated on November 10, 2013.

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14 Responses to “TrueCar Reviewed: We Bought a New Car”

  1. Congrats on the deal and new vehicle it’s nice when the ‘little guy’ can outwit the big companies, or in this case car dealer. I had never heard of TrueCar buying before so I’m glad I read your article as I’m looking into getting a new vehicle in the near future.

  2. oxide says:

    Great article and congrats on the new vehicle. I’ve never heard of TrueCar but just did a little search and found one in Canada. I have recently read that it is a buyers market right now which I believe may have contributed to your great quotes. It would be interesting to see if you get the same “no flexibility” speech if you went into the dealership now.

    I imagine that once you commit to TrueCar’s deal, you’re done? That is, no further attempts for negotiations? Unless of course they pull a bait and switch on you.

    • Lazy Man says:

      There’s no obligation to buy the car from the TrueCar dealer. You might be able to go there and try to get a cheaper price. I don’t know how you’d justify it unless their quote was really bad and you had one that was better.

      I’m betting that if they pull a bait and switch on you, you can complain to TrueCar. I don’t know if they’ll put pressure on the dealer on your behalf, but they could.

  3. Gary says:

    1. I would have left out the ‘earned a luxury car’ sentence. If you want to spoil your wife and kids, then own up to the financial decision and leave it at that. I spoil my significant other and that’s my choice as well.

    2. Congrats on getting a good deal without being held hostage by the car salesmen. The thing to know for next time is most dealers have email, and are perfectly happy to get email directly from buyers. (A little bit of Googling is usually all it takes to find said email.) So next time, you can perform the same request for prices on your own. You’ll probably get better offers since TrueCar, by definition, doesn’t work with every dealer and they charge a fee that could have gone into lowering the sales price. Once you get the initial offers, send a second email around with the best offer (excluding the dealership that offered the best offer, of course), asking if anyone can beat it. That will ensure you are getting the absolute best price.

    Pro-tip: sign up for a new email before emailing the dealership, and never give them your personal info apart from your name, so the dealers you don’t end up buying from cannot spam you.

    • Lazy Man says:

      I’m not spoiling my wife and kids, her income is in the upper levels of the military, and higher than mine (I’m the stay-at-home dad and family CFO). It’s not about me spoiling, but making that “financial decision” as you mention. It’s worthy of explanation as this blog has often focus on frugality, especially when it comes to cars as they are means to get you from point A to point B.

      I like what Clark Howard has to say about his own decision to be frugal doesn’t necessarily reflect the families. I think it is an important message and that’s why I specifically mentioned him.

      Good idea with the emails. I probably have over a hundred emails. When I got a quote back when I first test drove, it was one that I didn’t check very often.

      I was limited on time and I felt that I got a great price with minimal effort. That’s kind of what I founded the “Lazy Man” brand on… the value you can get with minimal effort. I feel like TrueCar exemplifies that goal. There was only one Acura dealership near me that wasn’t a TrueCar dealership. I planned on giving them my best TrueCar estimate, but when you a great price and you have a limited time, there’s no use trying to make stone soup. Obviously your circumstance may vary.

  4. […] T. @ Prairie Eco Thrifter writes TrueCar Reviewed: We Bought a New Car – I’ve been reading a lot about the TrueCar buying service and decided to give a try. […]

  5. Michelle says:

    Wow! Congrats on the big savings. I had a friend use TrueCar and she saved around $800. She’s a non-haggler so she enjoyed skipping that part.

  6. […] Man presents TrueCar Reviewed: We Bought a New Car posted at Lazy Man and […]

  7. […] TrueCar Reviewed: We Bought a New Car – A great read for anyone in the process of buying a new car. – Lazy Man and Money […]

  8. MJS says:

    Just wanted to offer a quick thought on the Destination Charge. I’ve seen them as high as $1,000 on much less expensive vehicles than your SUV. I would say they likely discounted the destination charge. I am not saying it never happens, but I have never seen one totally waived. You did pretty well there.

    As for the rest, I still owe you that analysis. Been swamped at work. I’ll have to send you a link to what I’m working on. You may appreciate it.

  9. John says:

    I too tried using Truecar.com to buy a new Toyota pickup truck. All I can say is bait and switch. I went on the site and put in the specifications for the vehicle I wanted. I was returned 4 different dealerships with 4 different prices. All of them about 1500 dollars less than the MSRP. The problem came when I went to buy one of these vehicles to find that that vehicle was not available anywhere near me. The problem is that Truecar.com gave me three different prices from those dealerships instead of telling me it was not in any inventory from any dealership in the area. I was lead to believe, that the prices and the vehicles I was given from the Truecar.com website that I could get that truck for the prices listed on Truecar. So basically, it is a bait and switch operation. it’s just a way for the dealerships to get your contact info and to get you in the door.

    • Lazy Man says:

      Well, TrueCar should have said that there isn’t one near you. However, I don’t think TrueCar keeps inventory of what’s available at each dealership. Did you check that the 4 dealerships they stated were all near you?

      When I submitted my request, I got quotes from 3 different dealers… all with locations clearly disclosed and quotes. They honor the quotes, so I don’t see the switch part of the bait and switch.

      I would put the fault with the dealerships in your area for no carrying inventory (or not being affiliated with TrueCar) than with TrueCar itself.

      Yes, it is a way for dealerships to get you in the door, but it is a way for you to get a price from multiple dealerships, with no commitment to buy.

  10. jgaudot says:

    I got exactly what you got. However, the 3 dealerships were listed with their prices. The problem was, that they didn’t have that vehicle, at all yet they gave me prices for that vehicle. The bait and switch I think is pretty obvious. They gave me a price for a vehicle the didn’t have to get me to buy one they did have. I’m not faulting the dealers. I blame truecar.com

  11. […] Car – This is an obvious one. There's a big difference in price between our Subaru Forester and our Acura MDX. The Forester is good for muddy dogs, the beach, and trips around town. The Acura MDX is a better […]

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