Comment

Comment by Randy Fry on December 20, 2011 at 4:16pm

John W. Hickenlooper

Governor

Barbara J. Brohl

Executive Director

George Baker Thomson, Jr.

Senior Enforcement Director

Bruce Zulauf

Executive Secretary

The Colorado Department of Revenue Auto Industry Division (Division) has reviewed the text below,

which was submitted by the Colorado Automobile Dealers Association after the Division’s

presentation to the Motor Vehicle Dealer Board (“Board”) at its meeting on December 8, 2011. The

Division believes the text fairly and accurately describes the issues surrounding the relationship

between Colorado motor vehicle dealers and TrueCar. The Division will take all steps necessary to

fulfill its statutory duty to assist the Board in protecting consumers, investigating suspected or

alleged violations of statutes or rules, and enforcing all licensing statutes and rules.

MEMO:

It has come to the attention of the Colorado Motor Vehicle Dealer Board (“Board”) and the Auto Industry

Division (“Division”) that a number of new motor vehicle dealers licensed in Colorado have relationships

with a company known as TrueCar. The Division has identified a number of advertising violations in

TrueCar materials and on its web site, as well as other potential violations of the Motor Vehicle Dealer Act

(“Act”) and related regulations. Any Colorado licensed dealer that is using TrueCar to promote and list its

vehicles to consumers is ultimately responsible for any such violations. The specific advertising violations

identified are:



Failure to include stock number of the vehicle for sale (violates Advertising Rule 3)



Use of the word “invoice” in the advertising (violates Advertising Rule 11)



Font size of disclaimers is too small (violates Advertising Rule 15)



Failure to advertise price of vehicle including all costs including Delivery & Handling (violates

Advertising Rule 13)

TrueCar disclaimers also refer to a “Documentation fee” which is terminology that has led to lawsuits

in Colorado in the past



No expiration date or time limit for offer which could possibly result in a motor vehicle being listed

for sale but no longer in inventory (violates Rule 3)

In addition to the specific advertising rule violations, the Board and the Division have concerns with the

ability of TrueCar to access the inventory information of a licensed dealer. There would appear to be the

potential for a consumer [who has been quoted a price for a

specific vehicle and assured a “guarantee”]

arriving at the dealership to find that vehicle has already been sold. The consumer may then be targeted for

the sale of a different vehicle. In certain circumstances, this may constitute a “bait and switch” transaction