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New Website Demystifies Car Pricing--For Free

Did you know that two of the best days to buy a car (if you can get away) are Christmas Eve and New Year's Eve? Did you know that you can get 20 percent or more off Saturn Vues and Auras right now because GM is trying to run through their remaining inventory?

I didn't either, but I'm up to speed now. These are a couple of the insights provided in TrueCar's "TrueTrends" report, released today (and available at www.truecar.com). The report also offers information on which cars are the most and least negotiable in purchase price. For obvious reasons, the 2009 Chrysler Aspen is one of the most negotiable, but who knew that the much more desireable 2010 Mini Cooper would be on the list? For the reason, read on.

Other very flexible models include the GMC Yukon (big SUVs are hard to sell these days), the Audi A5, and the Chrysler Sebring (bad ratings in Consumer Reports don't help). Least flexible models include the VW Routan (the comeback of the minivan?), the Toyota Yaris (small cars are back), the Mazda Miata (the bestselling sports car of all time) and the Mazda5. But why does the Hummer H3 appear on this list? Again, read on.

The brands with the biggest discounts--all at nine percent or more below the Manufacturers' Suggested Retail Price (MSRP)--are Ford, Lincoln, Chrysler, Mercury and Volvo.

The biggest incentives in December are on the 2009 Mazda6 ($5,250), the 2009 Kia Sorento ($5,000), the 2010 Toyota Tundra ($5,000), the 2009 Hyundai Sonata ($4,000) and the 2009 Kia Spectra ($3,500).

OK, that's out of the way. I talked to Jesse Toprak, who is TrueCar's vice president of industry trends and insights. "Why isn't pricing on the Hummer H3 more flexible?" I asked. "The point is not that the least flexible models are the most expensive," he said. "It means that they could be giving it away [a likely scenario with the H3] but they're giving it away in a similar range. When you walk in, you know what you're likely to pay?

And the Mini Cooper as most flexible? "That's on the other extreme," Toprak said. "The range of prices on the Mini Cooper is extremely wide. People can walk into the same dealership on the same day, and the one who is well informed will pay much less than sticker, and the other who is clueless will pay $3,000 over MSRP."

Upon disparities like this, businesses are based. TrueCar is a web-based California-based startup launched last spring, with $2.8 million in A-series financing and a second round aiming to bring in a lot more early next year. Toprak is a refugee from the respected Edmunds.com, and he has helped assemble a staff of 20 in Santa Monica (with 10 hires to come).

TrueCar's business model is not based on selling high-priced reports. The car-pricing information is free, and while stay that way Toprak says. Like most websites, it wants to offer valuable information, build up traffic, and pull in on advertising revenue. The site has some ads now, but doesn't need to produce income for a year, Toprak says.

The main competition for car pricing information is Consumer Reports, which charges $13 annually for a Bottom Line Price package that includes detailed reliability information, enhanced side-by-side comparisons of competitive models and "best deal" negotiation advice.

Where do you get information on sales transactions, anyway? It's not publicly available data that can be retrieved from a central source. TrueCar buys information from data aggregators to accumulate a database on all stages of the car sales transaction, from purchase to registration and financing.

"We're on a quest for truth," Toprak says. "We're not pro-consumer--we're pro-truth. We're putting it out there, whether people like it or not. We expect it will make some dealers unhappy, and some consumers unhappy. But the point is that it creates transparency. Two consumers can go to the same dealer and pay very different prices for the same car, and we explain why that happens."

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