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How TrueCar Is Building the Future of Car Buying Tech with Scott Painter · Auto Collabs

• 0:00
  [upbeat music] All right, we're here in Washington DC at the CBT Fair Pricing and Compliance Summit. Uh, thanks to our friends at Forbes Marketing for sponsoring our content today.
• 0:08
  I'm here with Scott Painter, CEO of TrueCar. Uh, you've kn- you know him, you've seen him.
• 0:13
  [laughs] Uh, y- uh, all I can think about is we were just in there and you were talking about the story of buying the company back. Just imagine- Yeah...
• 0:19
  you had this thing that you loved, and then you sold it to somebody, and then they really ran it hard- Yeah... and then you said, "I'm gonna bring this back to its glory."
• 0:27
  Um, tell, tell us a little bit about that story, 'cause it's pretty fascinating. You know, um, it, it, it is interesting to go back to a company that you founded. Um,
• 0:35
  I, I, I, I think great companies, great entrepreneurs solve a particular problem. And, and w- what we set out to solve at TrueCar was pricing confusion, and pricing transparency, um, went hand in hand.
• 0:46
  We wanted to make, you know, it easier for somebody who's a first time car shopper, a disadvantaged car buyer, to understand vehicle pricing, so c- they can make a decision about the product up or front.
• 0:55
  Can you tell me where that initially came from? That, that idea- Yeah... and that mindset of like, "Hey, this is what I have to do, so I'm gonna start this company."
• 1:01
  You know, it's interesting, I think all these companies have origin stories. For me, I've always had a lifelong love affair with cars.
• 1:06
  Uh, I was in the military, and when I got out of the Army, I went to West Point, and I came out to Cal Berkeley, and, uh, within 90 days of arriving at Cal I had no source of income, and I started helping people to buy cars because I was everybody's friend in the car business.
• 1:17
  And within 90 days I was buying 10, 15 cars a week. [laughs] And I really learned the business from the brokering side of the table, where I would help somebody to buy a car.
• 1:26
  And buying a car, and helping somebody to buy a car, is fundamentally different than selling a car. My mom still introduces me as a car salesman. [laughs] Um, but, uh- Proudly?
• 1:35
  You know, i- uh, well, i- I mean, she, she really thinks, you know, that's what, that's what I do, but- Yeah... you know, I keep telling her, "I don't sell cars."
• 1:43
  Helping somebody to buy a car is taking an order, and helping them to get their best deal is about understanding buying leverage and buying power.
• 1:51
  And so what TrueCar is is a real extension of that origin story, where we are actually helping consumers at scale to get themselves a better deal, a better value in the overall transaction, and we're using digital tools to do it, so we're saving them time and money.
• 2:05
  I, I think there is probably, uh,
• 2:08
  a- almost a re-education that has to happen with the new TrueCar, or TrueCar 2.0, maybe 3.0 we can call it, because i- it's definitely had its, its ups and downs in what it offered and how it was approached to the market was.
• 2:20
  What does the TrueCar 3.0, what's the approach to the market and what do you see, um, as the future? Yeah.
• 2:26
  So TrueCar is really not just about shopping for a car, it's gonna also be about buying a car, and it's also gonna be about owning that car. Really?
• 2:33
  Everything's gonna be connected through your digital device, um, like everything else in modern life.
• 2:37
  But you're gonna be able to shop with confidence, and instead of getting four million answers to a question, you're gonna be gettin'- y- you're gonna use artificial intelligence as an agentic AI to help you know which three cars are the right car for you.
• 2:49
  What financing source from 4,000 different credit unions, from 16,000 different lenders, is right for you. Scanning all of that in real time and being able to determine: Do you need a loan? Do you need a lease?
• 3:04
  Do you wanna subscribe? Do you wanna rent? What is the right sort of contract for you to get access to mobility for what you need?
• 3:11
  And I do believe that we're mo- moving very quickly into a future where mobility is a service. Okay. And we're not gonna need to own cars as an asset in the same way.
• 3:21
  You can always buy a car if you wanna collect it, but the idea of borrowing money, especially high interest rate money- Right now, yeah...
• 3:28
  to buy a depreciating asset is a bad trade, and it's, it's gonna be a bad trade now and into the future. Dave Ramsey certainly doesn't, doesn't approve. Yeah.
• 3:34
  So I, I, I believe that we're moving to a, a future that is frictionless and that is gonna give people the opportunity to drive what they want when they need it, and not have to continually get into these long-term, fixed term financing contracts.
• 3:47
  Okay. So, um, you just said something that I don't hear a lot in the conversation about, like, mobility as a service becoming the norm for how Americans drive.
• 3:56
  I feel like that was part of the conversation for a while, and then it kind of dissipated and went away.
• 4:01
  But you're saying you see that actually is not, never really, maybe lost a little momentum, but now it's coming back. Why would you say it's, like, an, like, that's a fresh conversation? Well, you know, it's interesting.
• 4:12
  Um, subscriptions for a moment were the way to unlock- Mm-hmm... access to mobility in a way that you could do it on your phone, you could pay with a credit card.
• 4:21
  You cannot pay a loan or a lease, for example, with a credit card- Oh, yeah... 'cause you can't pay debt with debt. Okay. Yeah. Um, as powerful as the smartphone, so is paying for things on credit. Mm-hmm.
• 4:32
  So the ability to do micro payment and connect everything through this miracle device, the smartphone, that allows us to use the phone as, not just identification, but geolocation, but also take pictures in a sensor and, uh, uh, it, it is a really, really fundamentally different thing than the internet, which was really good about syndicating content from one to many, whereas having an app, and nobody needs another app, but if that app turns on your jacuzzi [laughs] or, you know, changes the temperature in your home- Right.
• 5:00
  You, you'll limit it. Right... i- it, it's a key. Sure. Right? And so I, I really think, um, you know, sort of the future of, of ownership is gonna be about making everything flexible.
• 5:08
  And what's really fundamentally changing is you don't need to set up with a subscription. In order for you to have the benefits of a subscription, for example,
• 5:19
  you need to understand, will your lender allow you to get out of that contract, and for what price?
• 5:24
  So it's really about not entering into fixed term financial contracts that ultimately get syndicated upstream into a portfolio and then sold off as a batch of- Mm-hmm... of, you know, syndicated loans.
• 5:36
  If you have a credit union or a lender that is willing to be flexible, it really comes down to, is there a way to get rid of that car in a very predictable way?
• 5:43
  So a bigger way to unlock sort of the democratization and, and access to mobility, rather than saying subscriptions are the next great thing, is to say, can we make a used car liquid?
• 5:55
  Can you, just by taking a picture of your car, know exactly what that car is worth and have a hard money cash offer on that car? And I believe we can do that. I mean- Immediately.
• 6:04
  Yeah, you can see that, now that you bring it that way, you can see the roadmap there pretty clearly, actually.
• 6:08
  So if you can buy a car, and we'll buy it back any time, and we know what we'll pay for it every day- Mm-hmm...
• 6:14
  and the lender is willing to let you out of it We've just unlocked mobility as a service, and that doesn't require you sign everybody up for a subscription contract.
• 6:22
  You can still have a loan, you can still have a lease, and those things can actually revolve around those hard points in the, uh, actual numbers.
• 6:28
  And so the bigger get is we're on the event horizon of not just AI, but being able to have total liquidity in the automotive space, the ability for a consumer to get in or out of a car is- So how-...
• 6:41
  is becoming frictionless. How do we catch up with that from a, from a, I don't know, a paperwork regulatory registration? I feel like, you know, I can, I can actually hear the title offices saying like, "Well, you..."
• 6:51
  I mean, there's a lot involved with liquidating a vehicle, and so how do you see that problem being solved? Well, uh, again, I think this is the role of great entrepreneurs and great companies. Um,
• 7:02
  we do hard things, and doing hard, messy, highly administrative tasks is perfect for technology.
• 7:08
  And so given how organized the data is and the data structures are in the automotive industry, um, not only do we have build codes on every car- Good start, right...
• 7:18
  on every potential conceivably built type of car, we've got a MSRP and an invoice code, we can get penny perfect on not only what you're gonna pay, but the financing.
• 7:27
  And the ability now by just installing an app to unlock who you are and understand your identity means that we're not just pre-approving you, we're approving approving you. Right.
• 7:37
  And we're helping you to find the right way to unlock value. Making... Right now you can just make the decision you wanna make. That's right.
• 7:42
  Do you think blockchain technology has something to do with the future of this, these transactions, assets moving back and forth? Are we a little far from that? You know, I, I, I do believe it long term.
• 7:51
  I, I think the future of money is a whole nother conversation. Yeah.
• 7:54
  [laughs] I mean, you know, this fleetification of cars and certainly, you know, autonomous connected electric cars are coming and that they're changing not only the cost of a car, but how we access mobility.
• 8:03
  Um, I do think digital currencies are gonna make everything much more seamless and much, um, higher velocity for sure. Um,
• 8:11
  one of the cool things about, um, digital currency is not just the ability to pay for a thing quickly, it's also the ability to change ownership of a thing digitally. That's... Asset verification- Yeah...
• 8:22
  is really what I was thinking of as, as a solution. Like, well, how would we verify transition of this asset from here to here quickly and affordably?
• 8:29
  The, the, the d- the digital record on the sale of an asset requires though, that you have a state that's willing to embrace that. Right.
• 8:36
  And so it'll start somewhere, and it will start slowly, and it will catch on for sure. Um, we are d- You know, all the things that you can imagine about the future of automotive and technology are gonna happen.
• 8:48
  Um, almost everything's possible with a little bit of time and money, and it will evolve to a frictionless ideal state. Um, there's a lot of incumbency and a lot of reasons that people don't want to change- For sure...
• 9:00
  that are gonna slow that down. But I think it is inevitable. I mean, everything that you're talking about is absolutely gonna happen. Okay. So, um, I have to ask this question on behalf of our audience. Where did the...
• 9:10
  Where does the dealer land in all of this future, in the, the future of TrueCar, in all of this, you know, mobility as a service kind of thing?
• 9:18
  Well, I think, I think the modern car dealer has to make sure that they're operating with an efficient overhead.
• 9:22
  And, um, you know, certainly if you are selling a commodity product, think if you're selling blenders and they come out of a box, [laughs] um, doesn't matter where the consumer buys it, they're looking for price, they're looking for a good deal.
• 9:33
  But what's misunderstood by most is that the number one determinant of where a customer buys a car is still proximity. Mm. Convenience. I believe it. They buy close to home.
• 9:43
  So it's, uh, you know, 65, 70% of the time it's about proximity. So knowing where to be located as a dealer and where to be able to serve a bigger customer base is gonna be really important going forward.
• 9:54
  But I do believe you're gonna see another wave of consolidation in the car retail business.
• 9:58
  Um, you're gonna see, you know, these very smart, hyper-intelligent, adaptive dealer groups that are understanding where consumers are, how their, you know, um, needs are evolving.
• 10:07
  But buying a car is a big considered purchase, and most of the profit does not exist in the car itself. Mm-hmm. Um, it is in- For sure... the vehicle service contracts- Yes...
• 10:16
  uh, the maintenance plan, the peace of mind that comes from insurance, whether it's liability or comp and collision, all of these things are gonna be part of the equation. I think, for example, in addition to
• 10:25
  buying a car a lot easier, the ability to insure that car on a day-to-day basis through episodic- Mm-hmm... time-based insurance is unlocked through your phone. Oh, interesting. The ability to say, "You know what?
• 10:36
  I'm gonna go on vacation, so I don't have to pay liability insurance while I'm traveling. I'm just gonna pay a garage policy- Right... a dollar a day."
• 10:42
  Kind of like what people do when they put their boat away for the season, right? That's right. And if a tree falls on the car, you know what? The car is covered.
• 10:47
  But no one's driving it, so I don't need to have liability insurance that costs 20 times more than- I love that idea so much... a comp and collision policy.
• 10:53
  This is not mileage-based insurance, which is only looking backwards. Episodic time-based insurance is are you connected in the app? And if that car moves two feet, then we're gonna bill you $5 for the day.
• 11:03
  So do you see this as that, as being a component of TrueCar in the future? Absolutely. So there are four transactions that happen when you buy a car. You gotta, uh, get a good deal on the car.
• 11:11
  You've got to, um, you know, manage trade. Most people don't pay cash for their car, so you gotta help finance that car, whether it's a loan, lease, subscription, rental. Um, and then you've also got insurance. Mm-hmm.
• 11:23
  Everybody has to insure their car. Mm-hmm. And so I think if we're not in all four of those businesses, we're forcing you to go out and solve your problem somewhere else.
• 11:30
  So we're gonna definitely get into those businesses in a way that's both helpful to our dealers and helpful to our consumers. All right, last question. This is on the business side of things- Yeah...
• 11:37
  because I'm always fascinated about entrepreneurship and, uh, the turnaround of a business. Can you give us a little insight into what the turnaround of TrueCar has been from a business standpoint?
• 11:46
  You took it on at a certain point, and now you're starting to turn. You've made a lot of hard decisions. Can you just walk us through that?
• 11:52
  Well, I, I think, you know, when, um, y- you're looking at a turnaround, there, there are some realities about just blocking and tackling things you need to get done. Mm-hmm. Um, I call it hugging the cactus.
• 12:02
  You gotta go and do hard things. Um- Right. Well, it's in the situation it's in- Yeah... because of the structure that's in place. As a public company, TrueCar had to grow at all costs. Mm-hmm.
• 12:12
  And, um, the capital markets are looking for growth. There's really only three variables that go into market value, top line, bottom line, and growth, and TrueCar wasn't growing, and it was losing money.
• 12:21
  So that was really the, the penalty box that it was in.
• 12:24
  Um, I think we needed to figure out whether we could come in and do things a little bit differently, and certainly we knew we had to rationalize the business, and so did our employees and the team.
• 12:33
  But the way we did it, I think, was important. We didn't come in on some ego-driven sort of let's bash everybody up and, and, and go ahead and cut and slash. We, we were very, very selective about it.
• 12:42
  We got out of some immediate lines of business that were not core. Mm-hmm. That the company had sort of drifted off course. Mm-hmm. TrueCar+, TrueCar Wholesale- Right...
• 12:49
  and things that really confused the value proposition of are we in our dealers' business? And we're not a dealer. We don't want to compete with our customers.
• 12:56
  Our dealers- Yeah, there's a lot of explaining that had to be done with some of those products. Yeah, so for me personally, it was an easy thing as a founder to come back and say, "You know what?
• 13:03
  We're gonna get out of those businesses. We're gonna refocus our energy." Over 65% of my A+ talent was focused on the wrong stuff. Hmm. So that freed up a lot of A+ talent to focus on the right stuff, and then we did.
• 13:14
  We went ahead and, and we rationalized our business from almost 400 people down to about 200.
• 13:19
  So we took the employee base down significantly, but we're doing so much more now today with technology and AI, and we're more efficient than we've ever been.
• 13:27
  Um, we had the company turned around within weeks financially. The bigger issue- Wow... is really focusing on the product. Um, not one of my nearly 400 employees would have referred a friend. Wait a minute.
• 13:38
  That's a huge problem- You surveyed, and everyone in the company said, "I wouldn't actually refer a friend to use the product or to work here"?
• 13:44
  I, I, I said, you know, "What do you tell your friends and family about TrueCar, and do you refer them to use the product?" And they said, "No." And- What a wake-up call...
• 13:52
  the moment of truth at TrueCar is when you are a shopper, you're at some point asked to surrender your anonymity, give your name, your address, your telephone number, your email, all these markers, and you know you're about to be lead gen'd.
• 14:04
  And you end up within 10 minutes hearing from 15 dealers. That isn't good for the dealers. It's not good for the consumer.
• 14:10
  And the consumer didn't have a clear understanding of what is the price that they were being given.
• 14:13
  So almost everything that's being talked about in terms of the FTC and pricing clarity and making sure that consumers really understand what they're getting into is totally aligned with our mission.
• 14:23
  We want to make sure that consumers are informed, that they understand what is an MSRP, what is an advertised price, what is an offer of one, what is your out-the-door dr- you know, drive-off expense.
• 14:32
  All of those things are now being calculated in real time on TrueCar on every single car. Hmm. Well, so that's where we are. You've rationalized. You hugged the cactus. Um, you really have a trajectory.
• 14:44
  Do you, when are you, when do you plan on asking the question would you refer again? Well, you know, it's interesting. Um, w- we were able to, uh, not just turn the company around quickly, we, we, we, we, we...
• 14:55
  It's, it's been a huge success. So the end of the first quarter, March 31st- Mm-hmm... we posted almost $6 million profit. In profit. Now, we follow- In profit...
• 15:03
  the company, so TrueCar has not been a profitable company- So, so-... in a while... so, so TrueCar has had moments of profitability, but it's mostly been by selling assets, like ALG.
• 15:12
  TrueCar has never had an operating profit. Never? When I ran the company in TrueCar 1.0, it was all about growth, growth, growth. Mm-hmm.
• 15:18
  Um, but I left with 2,000 dealers and, uh, somewhere in the neighborhood of about, uh, a million monthly shoppers.
• 15:25
  Today, we've got as many as eight million monthly shoppers and 11,500 dealers, so it's a much bigger business, and yet it's half the size in terms of revenue.
• 15:32
  And there were some things that needed to be done to change that, and we, we made those decisions very, very quickly.
• 15:38
  But we posted a nearly $6 million profit, where the company had been losing two to 2.5 million dollars per month. For the first time in its history. In its history, operating profit. In Q1 2026. Yes.
• 15:48
  Well, I have to say congratulations on that. Thank you. Uh, I appreciate your entrepreneurial energy and your willingness to, like, pay attention to the consumer and develop and create for that.
• 15:57
  Thanks for giving us a few minutes of your time today. Absolutely. Thank you for having me. My pleasure.