Car Buying Service: Good for USAA, Bad for Members

Occasional Contributor
USAA promises a 'discount' and a pleasant buying experience . Sadly, the 'discount' is anything but, since it's based off MSRP. It's well known to dealers that MSRP is for suckers. Invoice would be closer, but even that number is fake; that's why holdback and other secret factory->dealer kickbacks were instituted. And, the prices advertised at actual dealers are usually lower than the 'discount' price USAA offers. So the USAA membe ris the loser on price. USAA and Truecar always make out fine, though, since they collect $ for referrals to the dealers. And they can collect more by enticing members into poor deals; the dealer, Truecar, and USAA split the profit. Truecar used to publish the real cost of a car to a dealer. If USAA/Truecar wanted to provide a real service to USAA clients, it would negotiate a price for USAA members that reflected true cost plus 4-5% profit for the dealer, with a small cut to USAA and Truecar (0.5% perhaps). As far as a good buying experience goes, this is not enforced (and that's if Truecar has any standards in its dealer cert program at all). Truecar referred me to 3 dealers out of the 12+ in my local area. The first had almost no inventory and priced way above market. The second was unresponsive, had almost no inventory, and played lots of nasty games. The third I almost bought from, but they did try the OFAC scam and when I walked, they actually cursed at me. So, I recommend skipping this 'service'. Even an ignorant car buyer is better off going it alone than feeling false confidence by using this service.


Cithryn, I'm sorry to hear of your recent car buying experience, this is not how we want our members to walk away feeling. I have shared your experience with a colleague who will review and reach out to you as soon as possible.

I echo the exact same sentiment. I negotiated a discount off MSRP that was nearly 10 times better than the USAA Car Buying/TrueCar scam price. I used the Car Buying Service to get the 0.5% interest rate reduction only.


USAA, if you are really looking out for your patrons, STOP OFFERING TrueCar and its bloated prices.

We appreciate you taking the time to share your feedback. The Car Buying Service pricing we offer our members is certainly optional and may not always yield the lowest price for your purchase. The Car Buying Service offers a baseline to support members who may not be as savvy in negotiating a purchase and/or need help doing so. We always encourage members to do their best in negotiating the final price for your purchase and I'm very happy you were able get a better price. At this time of year many dealerships have extreme discounts in house to clear out existing inventories to make room for the incoming models which is why you may be able to find and negotiate a more favorable price than the one listed through our Car Buying Service. Congrats on your purchase and please let us know if we can further assist you!

USAA's Truecar 'Complaints Manager' hung up on me before I got the first sentence out of my mouth.


At this point I echo BrendanAdams' eloquent summary from another thread:


"I tried the complain route. Here are the results:


What I got by complaining:

1.  A lot of email and phone traffic.

2.  A lot of apologies.

3.  A lot of explainations about why it didn't work.

4.  A lot of escalation to higher ranking people who gave me more of 1, 2, and 3.

5.  A lot of time wasted re-explaining what happened.

6.  A lot of additional frustration with each additional minute spent rehashing the issue.


What I didn't get by complaining:

1.  A car.

2.  My time back or compenstation for my time.

3.  Any concessions on pricing to bring it to the guaranteed price.

4.  Any modifications to interest rate to improve the situation.

5.  Anyone who was able to do anything except 1-4 under "what I got..."

6.  Any consequences to TrueCar or the USAA Certified Dealership.


So while lodging a complaint may seem like the right thing to do "so it doesn't happen to anyone else," I'm no longer willing to participate in that broken process. I'd rather just let everyone else know directly. Buyer beware, and cheers!"

to all when buying a new car.

1st dont buy one...  buy used instead as a new car will depreciate 20% within 2-3 years. Thus if you have a collision or other situation where you must obtain other transportation, then for your new car insurance will reimburse you the depreciated value. Even applying other credits, I doubt you will be made whole based on this awful depreciation fact of math.


If you must, then use COSCO.  It is a straight 4% on cars ordered. Much Higher than 4% off the MSRP price on new cars within the US. A real simple method. Not all dealers participate. BUT i found it simpler than all other methods. A REAL SIMPLE TRANSACTION to UNDERSTAND. 


rule of thumb:  if it sounds complicated, then run away until you completely understand.




-bill e.

Thanks for posting this and saving someone the time...I appreciate it. I'll just go elsewhere now instead of wasting time complaining, since you've proven it didn't work. Seriously, thanks. 

The lesson here is that no 'service' has your best interest at heart.  USAA, like any other company, is in it for profit.  Even being a 'member' isn't a benefit unless you yield something like better insurance rates, better investment returns, faster service, a real response to your complaint, or other tangible thing.  Other companies like TrueCar, AARP, AAA, and the car dealerships are just out to conceal how much they make at your expense.


My car purchase was from a dealer that I know through a friend.  The dealer is part of the owning family, and not just an employee.  No difference - I just got gouged less.  He made his money, as he does every day.  The 1000 cars on the lot (paid for free and clear) are evidence of that!  


Shop for the best interest rate.  Shop for a car at many dealerships, and take the data from the others with you.  Make them compete, and don't be shy about saying that you'll share anything you get with another dealership.  Don't buy at the last minute - take your time and plan ahead.  Chart the pricing, holdbacks, discounts, and taxes for comparison.  Shop in neighboring states (they sometimes have better deals).  Don't settle for what they can find on the lot(s) if you want something specific.  Stay away from fancy features you don't need or wont use.  


Me, I custom ordered my Durango.  No dealership in the country has one like it.  It took 6 weeks to make and deliver.  I had to be a jerk and strongarm the dealership to make it happen.  I had to be a constant nuisance, and remind them that they are in a capitalist environment and had obligations to me once I decided to commit to them.   Not a pleasant experience by any standard, but it's the only way to be satisfied that I'm not settling for the junk they ordered to quick-sell of the lot.


Remember that the only person who cares about you is the person you see in the mirror.  Not USAA, AARP, AAA, the dealership, or your elected representative (no matter what party) care about your needs or situation.  It's all on you!

From The New York Times Jan. 17, 2019 When it was time for Abbi Vakil, a hardware engineer in Silicon Valley, to replace his car, he turned to a company he saw as a tech disrupter, TrueCar. From its ads, he expected the service to help him find a car at the lowest price and without negotiation. “TrueCar advertised all over the place,” he said, “so I thought I’d plug everything into TrueCar.” But what Mr. Vakil experienced, he said, was not what the ads promised. “It was a clever stunt to get leads to these car companies,” he said, “so they could start inundating you with, ‘Buy from me! Buy from me! Buy from me!’” Before he could see prices for a BMW i3 and a Chevy Volt, he had to share his contact information with TrueCar, resulting in calls from seven dealerships, he said, initiating the very haggling he had hoped to avoid. And then there was the price. Some research on leasing led Mr. Vakil to suspect he could get a better deal than TrueCar offered. Ultimately, he leased a Volt for a lower monthly payment than the TrueCar guaranteed price. “I saved about 60 bucks a month — it’s a meal,” he said. “I just worked up from the bottom price.” A study from a nonprofit consumer group and a lawsuit in federal court against TrueCar, as well as myriad complaints on Twitter and web forums, suggest that Mr. Vikal’s experience is not rare, and that shoppers as well as dealers say they have been let down by TrueCar’s service. The consumer group found that the TrueCar guaranteed price averaged $1,550 more than what consumers paid when dealers had to bid for their business. The lawsuit, which was brought by 162 car dealers and is still working its way through the court, asserts that TrueCar’s “no haggle” promise is false advertising, and that the “factory invoice pricing” falsely implies savings that TrueCar does not deliver. TrueCar, in a written response, said: “On average, the prices offered tend to be thousands of dollars below M.S.R.P. and also tend to be at or below the market average transaction prices because dealers provide prices to TrueCar knowing that consumers can easily compare those prices to what other people paid.” TrueCar became a billion-dollar public company by collecting sales data from car dealerships and showing consumers what other buyers had paid for specific cars and options, and offering the cars at a low pre-negotiated price. Its website says it is behind the car-buying programs for over 500 companies, including USAA, AARP and American Express. TrueCar, which started as in 2005 and grew to prominence by giving consumers leverage when buying a car, has evolved into a tool to funnel buyers into dealerships. Jack Gillis, who is the car-buying authority for the nonprofit Consumer Federation of America, was asked what advantage TrueCar offers the consumer. “At this point,” he said, “I don’t know.” It wasn’t always this way. TrueCar was created with the consumer in mind, said Scott Painter, its founder. “I have been on a career-long crusade to make buying a car simpler, easier and more fun,” Mr. Painter said. He founded, a similar site, before TrueCar, and has now founded Fair, which leases cars on a month-to-month contract, much like a cellphone. “TrueCar was a hero brand and it took on the dealers,” he said. “I am not the most popular guy on the dealer front.” TrueCar has a built-in design fault, said the stock analyst David Trainer, who follows the company. While TrueCar gave consumers the information they needed to get a lower price from car dealers, the dealers paid TrueCar a fee for each sale. Dealers didn’t like paying for the cudgel that customers used to beat them down on price. “How do you answer to two masters?” Mr. Trainer asked. “You are either going to help the dealers or the consumers.” Image Mr. Vakil leased a Volt for a smaller monthly payment than the TrueCar guaranteed price.CreditKatrina Britney Davis for The New York Times Eventually, dealers revolted. Between December 2011 and February 2012, TrueCar’s franchise dealer count fell 35 percent, to 3,599 from 5,571, according to a federal filing. It put a big squeeze on TrueCar. To win dealers back, TrueCar gave them more control over the prices consumers would see. It stopped showing an estimate of what dealers paid for cars. “We had to turn over our customers to our dealers to make it work,” said Mr. Painter, who handed the reins to Chip Perry in 2015. Mr. Painter said he was still the largest stockholder, but is no longer employed in any way by TrueCar. Despite the changes, to buyers like Mr. Vakil, an impression of price transparency lingered. “I went to TrueCar based on what I thought it was, and it wasn’t that anymore,” he said. “It really was for the car companies.” A recent study by a nonprofit consumer group in Washington, the Center for the Study of Services, which publishes Consumers’ Checkbook, bolsters Mr. Vikal’s impression. The consumer group, which offers its own nonprofit car-buying service, said that in 137 car purchases over nearly six months it saved consumers an average of $1,550 compared with the TrueCar price. “In all of the testing we haven’t found a single case in which our price didn’t beat TrueCar,” said Robert Krughoff, president of the Center for the Study of Services. The Consumers’ Checkbook car-buying service gets at least five dealers to bid for a customer’s business. The lowest price on the selected car wins. Consumers’ Checkbook charges the car shopper $250 for its service, and after deducting its fee, the consumer saved an average of $1,300 compared with TrueCar. The organization offers free instructions for people who want to solicit bids themselves. “The best way to get good prices is to make dealers bid independently,” said Mr. Krughoff, “whether they use our service or not.” In 2015, a group of 162 car dealerships sued TrueCar in United States District Court for the Southern District of New York on an assertion of false advertising, claiming that by making promises it didn’t deliver on, TrueCar got an unfair advantage over competing dealerships. Judge P. Kevin Castel has ruled that the case can go to discovery on two allegations. One is that the “no haggle” claim is false, because TrueCar connects several dealers with each car shopper, which necessitates a negotiation. “The linchpin to our case is they have spent hundreds of millions of dollars convincing people they don’t have to haggle,” said Len Bellavia, who is representing the dealerships against TrueCar. TrueCar countered that a disclaimer on the website tells shoppers that they may have to negotiate, and that the disclaimer supersedes the advertising claim. It also argued that the claim is allowable as “puffery,” a legal term that means broad, vague exaggeration is allowed. In both cases, TrueCar is arguing that the no-haggle claim is not meant to be taken literally. TrueCar also argues that if a buyer just accepted the price on TrueCar’s first offer, the transaction would be no-haggle. The second allegation is that TrueCar offered misleadingly high “factory invoice” prices, implying that figure was the dealer’s cost, to make its discounts look more significant. TrueCar argued that consumers do not take the claim literally because they know dealerships make a profit. It added that there was a disclaimer that said the quoted invoice price on its site did not include discounts to the dealer, and that sometimes buyers did get a below-dealer-invoice price — although it was unclear how TrueCar was defining invoice cost in this instance. TrueCar has filed a motion to dismiss the case, which is pending in court.