Company: TRUE
Filing Date: 2025-05-06
Form Type: 10-Q
Source: 0001327318-25-000016
Chunk: 316

Company: TrueCar, Inc.
Filing Date: 2025-05-06
Form: 10-Q
Item: Part I, Item 2
Chunk 316
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 used automobiles are typically discretionary for consumers and have been, and may continue to be, affected by negative trends in the economy, including new tariffs or border adjustment taxes, the rising costs of energy and gasoline, the availability and cost of credit, reductions in business and consumer confidence, inflation, stock market volatility, and increased unemployment and changes in environmental regulations and fuel economy standards. For example, the recently-imposed tariffs on imported automobiles and automobile parts, if maintained for a sufficient period of time, could result in increased costs to American consumers for automobiles and automobile components produced or assembled outside of the United States, which could decrease demand for automobiles and negatively impact our business. Impacts to consumer confidence and purchasing power resulting from the direct and indirect effects of tariffs, generally, or other changes in trade policy, including retaliatory tariffs placed on exports form the United States by other countries and the rate at which such policy has changed and may change in the future, may further weaken the demand for automobiles, which could negatively impact our business and results. Further, the tariffs imposed on steel and aluminum, raw materials used significantly in automobile manufacturing, if maintained, could have similar negative impacts on the prices of cars, including those manufactured domestically, consumer demand and our business. 

Similarly, a change in gasoline prices, governmental policy or other macroeconomic factors could increase the relative demand for electric vehicles, many of which are currently sold directly to consumers by manufacturers such as Tesla without the involvement of franchised dealers such as the TrueCar Certified Dealers on our network, and which is a transaction structure we are not currently able to monetize.

Interest rates in particular can have a significant impact on automobile purchases and affordability due to the direct relationship between interest rates and monthly loan payments. Interest rate increases by the U.S. Federal Reserve, such as those implemented in 2022 and 2023 as well as any additional increases that could occur in the future, could negatively affect the number of vehicles purchased by consumers, and any reduction in purchases could adversely affect automobile dealers and car manufacturers and lead to a reduction in other spending by these constituents, including targeted incentive programs. Higher interest rates combined with increased vehicle prices resulting from low inventory, as discussed in the risk factor entitled “Our business is subject to risks related to the larger automotive ecosystem, including tariffs, inventory and global supply chain challenges, labor and other factors,” or other factors may also increase the amount of time that consumers wait between purchasing vehicles as the ability for a consumer to trade in or sell an existing vehicle to finance a new purchase may be diminished