Mass Action Suit Filed Against TrueCar
MINEOLA, N.Y. — The law firm of Bellavia Blatt & Crossett filed a mass action lawsuit against TrueCar today, claiming that dealers have been injured by the lead provider’s business practices. So far, 117 dealerships are part of the suit — a number Senior Partner Leonard Bellavia expects to rise drastically.
“I have another 50 [dealers] I could have included, but I never would have been able to file the case in a reasonable amount of time,” Bellavia tells F&I and Showroom. “Now that I’ve filed the case, I’m adding more dealers.”
The lawsuit filed today in Federal Court for the Southern District of New York represents non-TrueCar affiliated dealerships, meaning dealers that either have not subscribed to TrueCar’s services, or dealers that are former TrueCar subscribers. A second suit representing current TrueCar dealer customers will be filed in the coming weeks. The firm is also currently representing more than 1,000 dealers in an antitrust lawsuit against Carfax.
“Simply because a dealer is using TrueCar does not mean that they are happy with the business practices of TrueCar,” Bellavia notes.
The business practices in question include offering customers a “no haggle” price, a promise Bellavia says the lead provider breaks right at the start of a transaction, violating the Lanham Act and unfair competition and deceptive trade practices under New York statutes.
“When a customer logs on to the website and puts in their data, the information gets shot out to three separate dealers right off the bat,” he explains. “So as soon as the consumer clicks send, they will get inundated with texts, phone calls, emails and letters from three different dealers, each promising to do better than the other. So that's ipso facto haggling.”
In addition, Bellavia says that TrueCar’s business model forces its dealer clients into “bait-and-switch” situations by promising car shoppers that its dealers have certain colors and equipment in stock, even if that is untrue. The firm also alleges that TrueCar claims that its pricing is “below invoice,” which conveys to the consumer that they are getting a vehicle below dealer cost.
“It’s just blatantly misleading to the consumer,” Bellavia adds.
As for the non-TrueCar affiliated dealerships represented in the lawsuit filed today, Bellavia says they are adversely affected by the presence of TrueCar dealers in their market.
“[TrueCar] deceives customers in their market area, essentially poaching them,” the firm’s senior partner notes. “If you live within a mile of a dealership, you will see TrueCar commercials and when you go online you will get a certificate for three dealers that are further away than the non-TrueCar dealerships. So dealers are losing business.”
More Industry

World EV Adoption Set to Grow
A new report says the segment, despite recent setbacks in some regions, is poised for acceleration as many countries look to reduce pollution.
Read More →
Black Book: Weekly Market Update
Wholesale automotive auction business stayed steady last week as bidders encountered lower prices, analysts observed.
Read More →
Pricing Transparency Drives Purchase Consideration
An annual study by JD Power found that clear pricing matters to consumers on automaker websites, so much so that it increases their purchase consideration.
Read More →
Black Book: Weekly Market Update
Used-vehicle market depreciation was the prevailing story in the wholesale market last week.
Read More →
Smaller Is Looking Better
A growing number of Americans in the market for a new vehicle are opting for more affordable options, not waiting for market stability to bite the bullet.
Read More →
U.S. EV Market Slowly Stabilizes
U.S. electric-vehicle interest is slowly stabilizing since a major dip in sales after last year's end of the federal EV tax credit, and hybrids remain the leading electrified power train.
Read More →
Global EV Market Entering New Phase
Automakers are making investments to lower battery costs and optimize production to meet changing consumer needs.
Read More →
Black Book Weekly Market Update
The holiday weekend, not surprisingly, put a drag on wholesale automotive activity last week, analysts observed.
Read More →
Auto Affordability in Context
Cox Automotive points out the complex circumstances that have led to eye-popping vehicle prices.
Read More →
Black Book: Weekly Market Update
Automotive auction inventory increased last week, giving choosy bidders even more leeway.
Read More →