TrueCar vs. Edmunds vs. GearMint - Choosing the Best Forum for Buying or Leasing Cars

When it comes to buying and selling a car, everyone’s in a rush. Buyers are expecting high quality and fuel efficiency at an affordable price and sellers try their best to maintain their own profit margin. To add to the worries, you’ve got pushy salesmen, lenders, credit reports, leasing deals, add-ons and several other factors to consider.

The advent of online transactions has introduced several new forums where potential buyers and sellers interact, work out financing options, and buy/sell motor vehicles. So how would you identify the best forum from a list of thousands of online dealerships, to buy a car?

Here’s a comparison of three online car offers and information websites. Peruse the information here, and you’ll know where to bet your money:

TrueCar

TrueCar.com provides a car shopper with different estimates of the amount other buyers have paid for the car (or for similar cars) that he or she wants to buy. Based in Santa Monica, CA, the company also connects shoppers with its own network of dealers. The dealers primarily comprise of new car franchises that provide the shopper with TrueCar Guaranteed Savings Certificates.

Here's How TrueCar Works:

✓ The shoppers select the make and model, enter their zip code and view the different vehicle options.

They are then presented with price estimates, estimate savings, and average MSRP based on all recent purchases.

✓ After the shoppers register, they will be presented with a list of TrueCar certified dealers in their area and their prices.

✓ Certified dealers will then email the shoppers the pricing. The shoppers can then print in the form of TrueCar Guaranteed Certificates

✓ TrueCar provides a similar process for used cars through their ClearBook service. 

How True is TrueCar?

TrueCar certificates are widely used throughout the United States and the company has been able to enter in to negotiations with several leading brand names, such as Toyota, Honda and Ford. However, there are certain things that you need to know about TrueCar:

✓ Hidden Charges: TrueCar charges dealers $299 for every lead conversion for a new car and $399 for every lead conversion on the sale of a used vehicle. Dealers transfer the burden of the additional charges in the invoice to buyers. Their pricing model varies from State-to-State.

✓ Incomplete Information: TrueCar has recently changed its model to only show shoppers MSRP savings and excluded any additional fees. This makes it a bit more difficult for the shoppers to save money.

✓ Additional Fees: MSRP is offered instead of invoice price.  The latter is usually discovered at a later time when the shopper visits the dealership and is faced with all the additional fees.

✓ Privacy Issues for the Dealers: Dealers share their DMS and transactional data with 3rd party companies like TruCar, Edmunds, and Zag without looking at the big picture of how this is hurting them now and even more so in the long run. It's hard to imagine many industries sharing all the details of their transactional data willy nilly. Click here to read more.

✓ Privacy Issues for the Shoppers: Shoppers frequently complain about receiving a stream of emails from dealers that they did not even solicit, courtesy of TrueCar. They could be selling your lead to other dealers that are not on the site; so double-check their privacy policy.

✓ Compliance: TrueCar has also been banned from certain states, such as Colorado, for certain violations.

Edmunds.com

Edmunds.com is one of the earliest online auto pricing and dealership offering forums. It offers automotive data, reviews, and expert opinions and advice through a user-friendly website. It offers car shoppers a wide variety of tools like price calculators, car comparison, incentives based on the shopper’s area, selling and car appraisal tips, car reviews, dealer ratings and reviews and monthly payment information. Buying a car at Edmunds involves the following steps:

✓ Shoppers select the make and model and are then shown a list of MSRP for last year, current year, and next year, as well as consumer reviews.

✓ The shopper is provided with a list of upfront Price Promise from dealerships along with how much the shopper is approximately saving off MSRP.

✓ That Price Promise is then used by the shoppers to buy the vehicle from the dealership for that price.

The (Over) Efficiency of Edmunds

A slightly better alternative to TrueCar with lower privacy and compliance issues, Edmunds does have two major limitations:

✓ High Subscription Fees: Like many other flat fee sites, Edmunds.com charges dealers a high monthly subscription fee that can range from several hundred to over ten thousand dollars. Eventually, this fee is transferred to the shopper’s invoice.

✓ Limited Information: They do not provide invoice pricing in several states. In a way, this defeats the purpose of getting upfront final vehicle prices (invoice prices).

GearMint

GearMint.com is a new website launched in 2015 that provides a unique way to shop for cars. Based in New York City, the company offers a hassle-free and transparent way for the car shoppers to save money and strike deals with the dealers. 

This is How it's Done on GearMint:

✓ Car shoppers register for free and post the make and model that they want to buy or lease, used or new, without sharing their contact information with dealers.

✓ Dealers send them online offers that are transparent and public.

✓ The shopper and the dealer can then communicate through private messages while keeping the shopper’s contact information confidential.

✓ Other shoppers can help the shopper evaluate offers by voting for each offer (like or dislike) and writing advice tips about each offer.

✓ Shoppers can also evaluate offers by price, dealer ratings and reviews and other GearMint offer comparison tools.

✓ GearMint charges dealers a very low flat monthly fee ($30 per month) which can eventually translate into savings for the car shopper.

✓ GearMint does not use dealers' transactional data. By making all dealer offers public, they found a balance to offer transparency and honesty while respecting the shoppers’ and the dealers’ privacy .

What De-Gears GearMint?

GearMint provides a safe way for shoppers to interact with dealers without giving out their personal information and credit reports. The company is newly incorporated and is in the process of expanding its business and vehicle inventory.

However, Here's What You Should Consider Before Choosing GearMint:

✓ New Business: Even though the number of people using the site is increasing, GearMint is still a new website with not as many shoppers or dealers as the other major sites. The number of leads is still low, but is expected to grow over the next few years.

✓ Email & Phone Number : Shoppers are not required to share their contact information with registered dealers. This could come across as a detriment to dealers as they’ll be unable to determine how interested the buyer truly is.

The Verdict

It would be impractical to offer a one word answer on which website to choose. Each business is unique and has its own pros and cons. However, GearMint seems to be a breath of fresh air and somewhat promising for both the shopper and the dealer. 

GearMint might be a good option for shoppers to save time and money, get transparent offers, true invoice prices with no hidden charges, and discuss all the details with the dealer prior to giving away their contact information or visiting the dealership.

For dealers TrueCar and Edmunds provide many more leads than GearMint but as GearMint grows it can save them money on fees and save their industry by keeping their DMS and transactional data close to the dealers' chests.