Car Dealers Challenged by the Internet

While there is no doubt that the Internet has benefited the average consumer. After all, it has simplified the shopping process in many ways, while at the same time arming consumers with pricing information and product reviews.

However, this same technology has made survival much tougher for a number of dealers and automakers. In fact, the ongoing shifting border between consumer education offered by sites such as TrueCar.com and the need for the car industry to make a profit has possibly lead to some honest-to-goodness conflict between TrueCar and American Honda.

TrueCar makes a profit by earning a commission from dealers for each buyer it directs to that dealer. The rumor is that Honda has threatened its dealers that if they use below-invoice price sites, such as TrueCar, they could possibly lose the marketing assistance money that the parent company normally provides to its dealerships.

Fighting this rumored battle, both TrueCar and Honda have distributed releases clarifying their relative positions while failing to name the other.  Fortunately, this should have little impact on buy here pay here dealers, as the whole issue is only relevant to the sale of new vehicles, not used ones.