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AutoNation cuts off TrueCar due to contract disputes

Posted on in Contract Disputes

TrueCar is a California-based company that allows people looking for cars to shop and compare prices. The company hooks up a prospective buyer with three offers from dealers who participate in the service. One of the participating dealers, AutoNation, is considered the largest auto retailer in the country. It recently severed its ties with TrueCar over contract disputes.

The point of contention between the two companies was the fact that TrueCar wanted information regarding all of AutoNation's vehicle sales, not just the sales the car retailer received as a result of TrueCar's involvement. The Chief Executive of AutoNation said the company refuses to turn over the information because it would violate their customers' privacy rights. Moreover, he says there is no guarantee that TrueCar would not market the information to a third party.

The CEO of TrueCar says that it is simply asking the auto retailer to provide the information that TrueCar's other dealers provide. Reportedly, there are somewhere around 10,000 car franchises in its network. He says that his company terminated the relationship with AutoNation because of its refusal to provide information the company requires and also because AutoNation wanted a discount on TrueCar's fees. The California company claims that AutoNation was responsible for reporting referral information and was not giving TrueCar credit for every sale it made as a result of a consumer using the service.

TrueCar may be intimating that AutoNation breached the parties' contract by failing to report an unspecified number of referrals for which TrueCar would be entitled to compensation under the referral terms of the contract. Both parties report that the contract will be terminated due to their contract disputes. That does not necessarily mean TrueCar will not consider potential legal remedies if it decides to pursue restitution for referral payments it believes AutoNation failed to make.

Source: Los Angeles Times, " AutoNation dumps TrueCar in customer information dispute ", Jerry Hirsch, July 10, 2015

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