Dealers sue TrueCar for false advertising, unfair competition

Dealers sue TrueCar for false advertising, unfair competition

Some 117 dealers have sued car buying website TrueCar for $250 million, alleging false advertising and unfair competition. TrueCar says the suit is –meritless.”

The dealers are represented by Leonard Bellavi, a NewYork attorney and dealer franchise specialist, who has represented dealers in various lawsuits, including Chrysler dealers who sued the Department of Justice after their termination. The plaintiffs are not currently TrueCar dealers, but say they have lost customers to TrueCar because of the websiteês false advertising. A message on the website of Bellaviaês firm invites dealers to –join the dealer mass class action against TrueCar.”

The TrueCar site advertises upfront pricing, guaranteed savings and no negotiation. The lawsuit alleges, however, that when customers arrive at TrueCar dealerships, they often find that the vehicle they want is not in stock. When these customers are then ready to buy, they find they still may have to negotiate price, whereupon they take their business elsewhere. The $250 million plaintiffsê lawyers are seeking from TrueCar is premised upon three to seven sales per month, plus service revenue of $1,000 per vehicle, which they allege dealers are losing.

A statement from TrueCar in response to the lawsuit notes that the company has more than 9,000 franchised dealers in its Certified Dealer Network. –These dealers are committed to providing a new car buying experience to consumers grounded on truth and transparency, and consumers have responded by purchasing more than 1.7 million cars from TrueCar Certified Dealers.” The statement continues, –Notably, no consumers are parties to the lawsuit.”