Scott Painter On Reclaiming TrueCar And Rebuilding Trust With Dealers

TrueCar founder Scott Painter returns to lead the automotive marketplace following a $227 million transaction to take the company private, marking a strategic reset for the platform. On this episode of Inside Automotive, Painter explains why his comeback centers on restoring balance between pricing transparency for consumers and sustainable profitability for dealers.

Painter reflects on TrueCar’s early impact on automotive retail, acknowledging dealer skepticism tied to its original pricing model, and explains how today’s digital-first buying environment has changed expectations on both sides of the transaction. He outlines why TrueCar remains committed to being a marketplace connector—not a retailer—and how the company plans to refocus on qualified demand, lower acquisition costs, and higher close rates. The conversation also explores TrueCar’s shift away from mass advertising toward affinity partnerships, the role of credit unions, and how emerging technologies like AI could enhance digital engagement without disintermediating dealers. Looking ahead, Painter shares his vision for growth under private ownership and why long-term value, not disruption, now defines TrueCar’s strategy.

Topics covered include:

• Taking TrueCar private and resetting its business model
• Balancing consumer transparency with dealer profitability
• Marketplace positioning versus direct-to-consumer retail
• Affinity partnerships and credit union strategies
• Digital retail tools, AI, and sales efficiency

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Transcript

Deal Announcement And Skepticism

SPEAKER_01 0:07

Welcome to Inside Automotive with Jim Fitzpatrick.

Jim Fitzpatrick 0:11

Hey everyone, Jim Fitzpatrick. Welcome into another edition of Inside Automotive right here at cbtnews.com. TrueCar has officially gone private following a$227 million take private transaction led by the one and only original founder, Scott Painter. Scott now returns as CEO, and it's a move that's getting a lot of attention across the dealer community. For dealers, this moment brings both skepticism and hope. Today we're digging into why Painter wanted to reacquire True Car and uh what this new ownership structure means for dealers. So, Scott, thank you so much for joining us on the show today.

SPEAKER_00 0:46

Great. Thanks for having me.

Why Reacquire TrueCar Now

Jim Fitzpatrick 0:48

Sure, congratulations on the big news. Uh I think um, as I said in the opening, that there's a lot of skepticism around this. As you know, you were making some big waves 10 years ago uh before you stepped down, and there were dealers that were quite upset with you, to say the least. Why is he telling everybody the best price on a car in a specific market? So uh as I mentioned, you found a true car, stepped away, and now you're back. Uh what was the what was the situation to bring you back to reacquire the company?

TrueCar’s Value Prop And Dealer Balance

SPEAKER_00 1:17

Well, you know, I think I think buying a car is still time consuming and frustrating. I've always believed that great entrepreneurs, great companies solve a particular problem. I think today we've got more information than we've ever had. Customers feel that they have access to the internet. You know, when I was raising money and getting partners for TrueCar 1.0, we spent a lot of time talking about the internet's going to be a big deal. Yeah. You know, today, if you're a dealer, you definitely go to market using technology. You're posting your inventory digitally. If you're a consumer, a hundred percent of consumers go online. Oh, yeah. Um, obviously, today we're on the other side of smartphone adoption. So technology and um talking to customers digitally is a bigger part of auto retail than it's ever been. And I think that both customers and dealers need to be in balance, and certainly consumers want to have better and clearer information. And I think today dealers more than ever are trying to figure out how to relate to those customers and to get them across the line, if you will. But you know, the TrueCar dealer network is 11,500 dealers across the country. It's mostly franchise dealers. Um, these are the most forward-leaning dealers are looking to how to integrate technology to help them sell more cars and relate to customers in a better way. So I've got a really good group of core dealers that, you know, the company's almost four times larger in that respect than than when I was running it uh back in you know 200 uh you know, eight to 2016. So it is a bigger company today. It's got nearly 8 million unique in-market customers. True car is a bit unique in terms of the overall marketplace dynamic in that most people who go to True Car are looking for a new car. Whereas 80% of consumers who go to cars.com, auto trader, cargurers are really looking for a used car. And the used car shopping value proposition is always about variety. You're looking for as many cars as possible. The true car value proposition was always about transparency and understanding what is a good price and educating the consumer, leveling the playing field. So I'm not coming back to disrupt anything. I'm really coming back because I feel there's a tremendous opportunity and there's unfinished business. I think that buying a car should be a great experience. And I think that we definitely saw best practices. And, you know, what the journey that TrueCar has been through today, um, I think just represents a tremendous opportunity to drive more sales. You know, the company resulted last year in about 350,000 cars sold, but touched nearly 10% of everybody who shopped for a car. So it's very relevant. But I do think that, you know, what we need to refocus the company on is the core mission of delivering truth and transparency to consumers, helping them to save time and money when buying a car, but doing it in balance with our dealer and our dealer networks and need to be profitable. I think you know, we're we're looking for more solutions than ever to be profitable as a dealer.

Jim Fitzpatrick 4:06

Yeah. And I think that transparency part is what makes dealers a little bit uneasy based on your last tenure with the company. Um, they they felt as though, wow, this guy is not only leveling the playing field, but he's cutting us out in some cases because of all of that transparency that you speak of. So, what does fair and and sustainable dealer partnership look like uh to you today?

Marketplace vs Retailer: Not Carvana

SPEAKER_00 4:29

You know, I've I've done a lot of media media interviews since last Wednesday when the transaction closed. And there seems to be just a lot of interest in how auto retail is changing, and a lot of people are talking about, for example, Carvana. True car, most importantly, just to start out, is not a car dealership. It doesn't sell cars and it doesn't do anything that Carvana does. Carvana is not a digital automotive marketplace, it's an auto retailer, it's a used car dealer predominantly, and really what they've done is captured the zeitgeist around delivering the car in your driveway. I think that what we've learned in the pandemic is that the customer doesn't necessarily need to come on down. So the world has definitely changed, but TrueCar is really very much a platform that connects those who are trying to sell a car with those who are trying to buy a car. And the same way that Uber connects an Uber driver with an Uber consumer, um, we do that using technology, but we're really a platform for helping the customer and the dealer to do what they need to do. Um, you know, there's been a lot of talk about selling cars directly and trying to, you know, really get in the middle of that transaction. TrueCar doesn't do that, and we're not going to do that. I think really the focus out of the gate here is thinking about how can we use modern technology, AI, how can we lean into the fact that people are on their smartphones. There's a lot of ways we can really raise the fidelity and the um, you know, the outcomes in those conversations between our dealer network and those consumers.

Jim Fitzpatrick 5:53

Sure, sure. What have you heard back from the dealer community since the announcement?

Dealer Reactions And Back-To-Basics

Profit Discipline And Affinity Flywheel

SPEAKER_00 5:57

You know, I haven't heard a lot of these concerns that you're talking about. I think that the dealers are excited. It is harder than ever to sell cars. And even though consumers have all this information, I don't think that it's radically improved necessarily. So consumers and dealers are all going to market differently than they ever have, that's for sure. And I think that all the dealers that I've talked to are really looking for us to get back to innovating, making a product that really works. And, you know, I founded this company based on this very simple concept that a consumer wants to save time and money and use technology. Today, everybody is using that technology. And so I think you know, TrueCar has lost its way a little bit and it doesn't really deliver on that promise as much as it could. And so that is the really inherent value of the company that we acquired. You know, we acquired the business, I think, at a very good entry point. We didn't overpay for the company, but you know, TrueCar is not in a lot of trouble. This is a company that generates almost$15,$16 million a month in revenue from a national network of really committed dealers. And the original premise was as we brought USAA members and other customers from these affinity groups to the table, these are special customers that are in-market because they're either trying to get a car loan, they're trying to get auto uh insurance. Those are all things that are very highly correlated to in-market behavior. But the thing that a customer does right before they buy is they check price. And TrueCar has always been about that pricing transparency. And so the TrueCar customers tend to have a much higher close rate. They tend to be much more in-market, and that's really the value that we want to drive back and deliver to our dealers. But for me, coming out of the gate, it's really going to be about blocking and tackling. This company is, you know, in public terms, adjusted EVITA break-even, which is not quite yet profitable. Um I think that you know that we we do have to run this thing with discipline. Companies do have to return to their shareholders. So I'm I'm very focused on making sure that the company is of the right size, but that we're growing with our affinity network and our partners, one of our big investors in this transaction alongside of us was Pen Fed Credit Union. And while Pen Fed serves military very much like USAA did, Pen Fed is one of 4,600 credit unions, but it's only one of six that has a national charter. So Pen Fed can actually lend to a customer in any state in the US or U.S. territory, which really means that they have the advantage of being a nonprofit. So they have a two to four hundred basis point advantage over a traditional retail bank, for example, and they also have a commit commitment to being 100% digital. So we we we think that those types of partnerships are certainly going to help because 94% of consumers do not pay cash for their car. So again, really going back to the bread and butter of delivering value to affinity members. And you know, TrueCar was never meant to be or built as a VIN-based classified marketplace. Today it competes against AutotraderCars.com, Car Gurus, really on their turf, on their terms, I am not as focused on building TrueCar back into a larger, bigger scale, classified listings marketplace. It really needs to be an auto-buying program that delivers on that core value proposition of saving time and money. But it's really a flywheel. When you save the consumer time and money, you have lower friction, higher close rates. And really, if we don't deliver the dealers on our network more sales for less money, we fail just as much as we don't help the customer.

Jim Fitzpatrick 9:24

Right, right. Dealer acquisition costs remain a major concern for dealers. How specifically does TrueCar plan to help dealers lower the cost per sale while still protecting the margin?

SPEAKER_00 9:37

Well, customer acquisition cost is the same for every business. It's a horrible uh you know reality. You have to be very mindful of your either cost per sale or cost of goods. But at the end of the day, you just you know put your finger right on the whole ballgame. If TrueCar doesn't reduce your cost per sale, you know, when we started the company, we were focused on delivering a sale for about$300. Today it's costing a little over$500 for a dealer to sell a car using technology, and we need to bring that cost down. We need to be very much focused on getting back to about three to four hundred dollars. The average dealer is spending somewhere between five and seven hundred across the country as they go to market, you know, naturally, organically. But I think that for us, we can get much closer to that$300 sort of North Star.

Lowering Dealer Cost Per Sale

Jim Fitzpatrick 10:22

We haven't really seen TrueCar in the last uh few years uh be as consumer facing or pushing out with with aggressive marketing to capture that in uh market consumer now uh that a dealer can benefit from. Will we see that in the future where you're bringing together both the consumer and the dealer through aggressive marketing plans?

Quality Over Quantity And Private Pivot

SPEAKER_00 10:43

It's not about aggressive marketing. It really is about understanding that TrueCar was built on this concept that affinity members deserve a special price and trusting the goodwill of a relationship with a USAA or a Pen Fed or one of these other credit union partners, and TrueCar today works with 250 different affinity-based organizations, and we work with them to offer a special program to their customers, to their members, and they do our marketing. The real big idea at TrueCar was also to make sure that we reduce our customer acquisition cost and risk and time to market by partnering with them, providing an auto-buying program, and that is really the bargain that the dealers on the program are making. They are representing those brands, they are getting that goodwill, they're reducing friction, reducing sales cost, and increasing sales velocity. That is really the bread and butter we're gonna go back to. We're gonna be focused on really scaling our audience with those partners, not going on television, not spending a lot of money on Google AdWords. Okay, you know, and one of the reasons you want to be a private company is you avoid growth at all costs. If you're a public company, every 90 days you're chasing that growth shot club. And I think right now what we've got is a really good group of supportive shareholders. I am I'm absolutely comfortable with the idea that we're gonna make a pivot from quantity to quality. I'm okay with a slightly smaller dealer network, a slightly smaller customer audience. If we're at the end of the day, what really matters is that more customers are buying more cars.

Billing Models And Dealer Tooling

Jim Fitzpatrick 12:14

Sure, sure. Is the business model one that says you're gonna uh be charged for that lead if it turns into a sale based on a per sale basis versus an advertising uh uh classified listing service that you just mentioned earlier?

SPEAKER_00 12:28

Yeah, you know, uh TrueCar operates in a highly regulated environment and it has billing models and billing programs different in all states across the country. A lot of that came because of TrueCar's history. So we're not looking to come in and disrupt anything. I think what what I really am focused on doing is making sure that the 11,500 dealers in the network, starting with some of our anchor partners like Auto Nation, who not only were on the program and already owners of TrueCar, also stepped up and became bigger partners and bigger owners of the company in this transaction. We want to continue to deliver them value, but we want to serve all the dealers in that network. We want to give them the toolkit they have to be able to understand how to relate to customers, how to relate to a better process, how you know how are these customers coming to market, what are their expectations? All of that is what's going to ladder up to better results for those dealers. But you know, my job one here is to make sure that we continue to deliver value as we go through this pivot and really rationalize the business, understand how to serve our customers profitably.

What’s Different This Time

Jim Fitzpatrick 13:23

Right, right. You've just mentioned a number number of them, but if you had to pick one or two key factors that separate the old Scott Painter of 10 years ago and TrueCar to the new Scott Painter under the new TrueCar, uh what would that be for the dealer audience?

Amazon’s Role And Limits

SPEAKER_00 13:37

Well, you know, when we built TrueCar 1.0, we were really trailblazing and pioneering this concept that consumers were going to go to market a different way. And we didn't yet know exactly what consumers were going to expect and how they were going to behave. When I say that we're on the other side of that adoption, I mean it. Today 100% of consumers go online and use digital tools. There's really only four or five key marketplaces that they go to. In the beginning, TrueCar really made a name for itself and became a brand because we represented something that customers didn't see a lot of. Today it's more status quo to get all of this information. I think that you know what I'm trying to focus on right now is really understanding the balance in the ecosystem between consumers and dealers. True car doesn't sell cars, it's not going to sell cars, and so making sure that our dealers have the tools that they need and the information they need to win with consumers does represent that balanced part of the equation. And, you know, I'm also a lot older. I was uh, you know, when I started sort of TrueCar 1.0, I was in my early 30s. I'm, you know, I'm 57. I am I'm not looking for anything that's combatitive. We're not looking to disrupt for disruption's sake. What we're focused on is delivering value. Um, this is really rooted in a deep belief that TrueCar means something to consumers. Technology delivers efficiency, effectiveness, more results. And I think that there's a lot that's being left on the table. We we think there's a ton of intrinsic value in the brand. But I'll just give you a North Star. I think this business can be five times larger, a billion dollars in revenue in three to four years. Um I think this business can be extremely profitable in doing that and serving our dealers and moving from 300,000 car sales, resulting in what we do every year, to over two million. So this is a very, very big opportunity. And we're talking about a massive market. You know, we've watched a company like Carvana go from non-existent to$100 billion in market cap in just a you know a small period of time. Sure. I think how new car dealers go to market is in a massive transformation. I think we're doing more of the transaction online than ever before, but I think the big idea here is we're not going to come in and try to sell cars directly. We're gonna make sure that we are working with dealers and giving the tools to be able to be more effective and have better results with those customers.

Jim Fitzpatrick 15:51

Gotcha, gotcha. Talk to me about your take on Amazon entering the auto industry that we've seen now over the last couple of years. I think you're uniquely qualified to uh chime in on that. Um, where do where do you think that's going? And is that something that uh dealers should be wary of or they should embrace?

Used, Finance, Trade, Insurance Equation

Trust, Logistics, And AI’s Impact

SPEAKER_00 16:09

Well, first of all, Amazon has been a, you know, on the verge of getting into the auto industry for almost 25 or 30 years. It's um, you know, it's a it's a very intuitive next step. But Amazon is really providing brochure where on the new car side. I think there's a lot of intuition that Amazon has a river of customers that they don't have to pay additional dollars for. So back to your comment about customer acquisition costs, they've already got a customer who's there doing other things, so why not offer them something that is auto-related? The question is really how are they gonna do that? Does it serve dealers? Does it disintermediate them? You know, I can't speak to what Amazon's plans are, but historically, Amazon hasn't really been much of a threat or really made much of a difference. They've always been making a lot of noise. Um, I think it would also be very hard to assume that on the new car side, for example, that Amazon is gonna be able to put a price on the car that's gonna matter much, again, because dealers set price and control the customer experience. So it really is yet to be seen whether or not they're gonna crack the code on the new car side, on the used car side, a little bit different. It really is about variety and listings. And you know, I think that it would be more interesting if Amazon, given its market cap, were to acquire one of the other marketplaces. Um, but until they do that, I don't I don't think that Amazon's gonna necessarily be a threat to any of these other companies. And I I'm trying to get TrueCar away from just thinking about, you know, it's a competitor to Cars.com or Auto Trader or Car Gurus. You know, TrueCar's core value proposition has always been about auto-buying and new car pricing transparency, whereas all these other sites are so focused on used cars. I I don't think, in particular, for me, the you know, the Hyundai test does much beyond just brochure wear. Ultimately, it's you know, come in, learn about the car, it's very, very slick, it looks good. You know, I was surprised, for example, that when Amazon invested in Rivian, that you didn't all of a sudden start seeing Rivians coming onto Amazon as part of a prime subscription or something like that. But uh at the end of the day, uh those those are big steps and they have not happened. So I I I don't see that Amazon is going to have a super disruptive sort of impact on auto retail. But the other, you know, sort of big news is that you know auto retail is just so large. You've got so many consumers, so many dealers, and the the difference between new and used cars is radical.

Jim Fitzpatrick 18:23

Yes, for sure. You mentioned uh used cars and not really competing with those other third-party sites out there. Will there be any element on True Car that addresses the used car market?

SPEAKER_00 18:33

Of course. Um I think that you know it's important to recognize that even though you've got you know about 18,000 franchise dealers, every franchise dealer sells used cars, and used cars is a big part of the overall profit equation. I think you know, every time somebody buys a car, there's really four transactions. You've got to you've got to be able to negotiate for the price on the car that you're buying. 75% of people have to sell the car they're driving first, so they've got a trade-in issue. And if you're not addressing both, you're not gonna solve that customer's overall uh problem. 94% of people do not pay cash for their car, so conflating auto shopping with auto finance is super important. And being able to give customers the ability to shop based on monthly payment is really truly about unlocking the affordability question. And then finally, 100% of consumers need to insure their car to be able to drive it on public roads. So if you're not really focusing on all four of those transactions and how they ladder up to the cost of ownership, all you're really doing is playing a role in passing a customer along to somebody else in that journey. You know, if we if we look at where custom, you know, companies like Carvana, for example, and I've got tremendous respect for what they've been able to accomplish, but they're they're a used car dealer that has really unlocked the code of how to find those customers online and how to relate to them digitally. And I think that, again, you know, I was asked the other day, you know, how are you planning to compete with them? I said, you know, we don't we don't compete at all. Carvana has 25 to 40,000 pieces of inventory and they're one used car retail brand, versus TrueCar has 11,500 dealers across the country. You got a million and a half to three million pieces of inventory at any given time. And that network of brick and mortar dealers represents a far greater logistics capability than any one company could ever represent.

Jim Fitzpatrick 20:13

That's right, that's right. And I think the industry over you know, the ever since Carvana started has really learned a lot in this sense that a used car buyer can go online, buy the car, buy it early on from a company they really weren't sure of or heard of, wasn't their local dealer that they did business with, and have it delivered right to the front door, like we see, you know, the trucks doing each day. And uh that I think that opened up the eyes of a lot of automotive retailers out there to say, wow, there's a whole market of consumers out there, and it's growing that that's the way they want to purchase a vehicle, right?

Closing And NADA Plans

SPEAKER_00 20:44

Well, you know, I I think it it you know the car Carvana is not the first to become a trusted brand in a black hat space, right? Used car auto retail is not necessarily considered by most consumers to be so you know a high trust environment. Uh, you know, CarMax came along and they really disrupted the car business in very similar ways to what Carvana has done. Um, Carvana's basically said, you know, we're we're CarMax in your driveway. So I think you know, we're we're in a new day for auto retail uh with respect to technology, what's possible. I think we're gonna see a lot more digital interactions going on between consumers and the dealer that's selling the car. And I think the big, big change that's coming is you know, how is AI gonna affect all of this? It's not just about lead handling. AI is gonna be transformative in terms of that customer journey and yeah, what gets optimized and how.

Jim Fitzpatrick 21:35

That's right, that's right, no question about it. Will you be at NADA this year?

SPEAKER_00 21:39

I will be. I'm heading in on Monday, the second, and I'll be there through Thursday the fifth.

Jim Fitzpatrick 21:43

Fantastic. The kinder, gentler, Scott Payner, for dealers out there watching. This is uh something you want to take a close look at for sure. Uh you just heard it here, folks, on CBT News, and he's made the rounds on a number of other media platforms out there. He's going after it. He's helping dealers in a big way. So he says, but Uh, we have no reason to believe that he's not going to follow through on all of that. So uh I'd ask you everybody to take a close look at at uh the new True Car that's out there. Scott Painter, CEO and founder of TrueCar. Thank you so much for joining us on CBT News. Love to do a follow up with you to see how things are moving along.

SPEAKER_00 22:15

Love it. Thank you very much for the invite. Thank you.

SPEAKER_01 22:19

Thanks for watching Inside Automotive with Jim Fitzpatrick.