Businessmodel of TrueCar

Customer Segments

Truecar serves both consumers that wish to buy or sell cars and car dealerships that wish to expand their reach across the public. Through its affinity programs, the Company also provides vehicles to a number of large businesses, including Fortune 500 companies.

Truecar is particularly useful to consumers who are inexperienced in the new and used car market and do not have technical knowhow. Its convenience also attracts a number of users who do not have the time or resources to sell their vehicle privately.

Value Propositions

For consumers Truecar provides a free and convenient platform through which car prices can be searched and compared on a regional basis. This includes a broad range of vehicles and brands all of which can be searched from the Company’s desktop or mobile websites and mobile apps.

Truecar provides detailed information regarding the price paid for certain makes and models of cars in a given area and, where available, estimating prices for a preferred make or model of a car from among Truecar’s dealer network.

Consumers using the Truecar platform are typically able to find a cheaper price than they would when searching independently.

For dealers, Truecar provides support and access to a network of affiliate marketers, increasing their market reach at minimal up front cost.

Channels

Truecar’s online marketplace can be accessed via its website at www.truecar.com. The Company also has two iOS and Google Play apps: Truecar Mobile and Truecar Sell. Truecar Mobile allows users to track trends in prices for various models of car, while Truecar Sell allows users to list their car for sale and view offers made on their vehicle.

Dealers also have access to the Truecar Dealer Portal via the Truecar website that enables dealers to manage their relationship with the Company.

Customer Relationships

Truecar’s platform is available as a self-service model, with searches and comparison available to users after registration is complete. Some searches can also be completed without a registration.

Once a transaction is entered, users are required to interact with the relevant dealers but are not required to deal directly with Truecar itself.

In order to join the Truecar dealer network, dealers must contact the Company directly and discuss terms with a company representative. Management of Truecar’s dealer relationships require ongoing personal care.

Key Activities

Truecar develops and maintains an online platform for the sale of new and used cars via a network of dealerships across the US. The Company also collects and analyses data pertaining to car prices and buying trends across its network of dealers, which it provides to its customers enabling them to make more informed buying decisions.

Truecar also participates in a number of affinity buying networks which help to extend the reach of individual dealers and provide consumers with a greater degree of choice and variety.

Key Partners

Truecar partners with numerous companies across a variety of sectors as part of its Affinity Auto Buying Programs, which sees the Company employ a number of affinity marketing partners. Truecar lists more than 650 affiliate partners on its website, including Fortune 500 companies, banks, credit unions, insurance companies, member organisations, online publishers and online marketplaces. Among Truecar’s affinity partners are auto club AAA, online retailer Sam’s Club, credit provider American Express, car insurer GEICO, and news and media outlet US News.

Truecar also partners more than 6000 car dealership franchises across the US, through which it makes its sales. The Company’s dealer network is overseen by Truecar’s National Dealer Council which comprises representatives from 19 leading dealerships, including Hendrick Automotive Group, Stanley Auto Group and Pohanka Auto Group.

Key Resources

Truecar’s key resources are its IT infrastructure, including its proprietary technology and software platform, its affinity marketing partners, its dealers and its personnel. There are a number of patent applications registered with the US Patent and Trademark Office in Truecar’s name.

This notably includes applications for a ‘Method and System for Selection, Filtering or Presentation of Available Outlets’, ‘Sales Analyser Systems and Methods’ and ‘Systems and Methods for Vehicle Purchase Recommendations’.

Truecar’s network of dealers, through which it makes sales, are also crucial to the Company’s activities, as are its personnel who manage the Company’s various partnerships.

Cost Structure

Truecar incurs costs primarily through the management of its partnerships and the maintenance and development of its platform and technology.

The Company’s sales and marketing and research and development teams accrue substantial costs, as does the upkeep of Truecar’s server space and data centres.

Revenue Streams

Truecar generates revenue on a transaction basis, taking payment from dealers every time a new or used car is sold through the Truecar platform. The Company reportedly charges its dealers $299 for every sale of a new vehicle and $399 for every sale of a used vehicle.

Truecar also sells sales leads to dealers, using transaction data and buying trends analysed across its network of dealerships. This allows analysis of how specific models of car are selling and more accurate market information to be shared.

In 2015 Truecar generated just under $260 million in revenue and sales.