Business & Real Estate

Sacramento-based auto dealers group’s lawsuit against TrueCar moves forward

A Los Angeles Superior Court judge has ruled that the Sacramento-based California New Car Dealers Association can proceed with legal action against a popular Golden State car-buying site.

The CNCDA, which represents more than 1,100 dealer members, originally filed a lawsuit against Santa Monica-based TrueCar Inc. in May 2015, contending that the latter’s automotive pricing and information website is not in compliance with California laws.

CNCDA contends that TrueCar is violating California Vehicle Code sections requiring vehicle dealers and brokers to be licensed, and that TrueCar has produced false and misleading advertising, and engaged in unfair competition. The CNCDA alleges that TrueCar’s advertised claims of “no surprise or hidden fees” is false, because TrueCar receives a fee on each sale made through its website.

The suit does not ask for monetary damages but seeks a ruling mandating compliance by TrueCar, which has steadfastly insisted that it is already in compliance with state laws and expressed dismay that the CNCDA has been pursuing legal action affecting about half of its members.

The case has dragged on for months, with TrueCar moving to dismiss the Sacramento group’s complaint and CNCDA filing amended complaints in August 2015 and earlier this year.

“We are gratified by the court’s careful ruling and look forward to the opportunity to prove our claims on the merits,” CNCDA President Brian Maas said in a statement. Attempts to get comment from TrueCar on Tuesday were unsuccessful.

Started in 2005, TrueCar works with affiliated dealerships nationwide. TrueCar touts its ability to give buyers accurate information on what other consumers have paid for motor vehicles, giving prospective purchasers an accurate indication of the price of a given motor vehicle. Through its digital platform, TrueCar says buyers can get economically favorable offers from dealers and avoid on-site haggling.

CNCDA said Los Angeles Superior Court Judge Nancy Newman has set a trial date of Aug. 7, 2017.

Sacramento-area dealers have declined to comment, citing the ongoing litigation.

Mark Glover: 916-321-1184, @markhglover