Company: TRUE
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0001327318-25-000065
Chunk: 88

Company: TrueCar, Inc.
Filing Date: 2025-11-06
Form: 10-Q
Item: Part II, Item 1A
Chunk 88
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, as measured by the rate at which our leads convert into buyers, are important variables in the success of our 

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business and depend on many factors, including the attractiveness of our consumer experience, the efficiency of the algorithm that matches our users with TrueCar Certified Dealers and consumers’ loyalty to our brand or to that of the affinity partner through which they were introduced to our Auto Buying Program. When our lead quality or quantity declines, for example, in response to macroeconomic factors such as interest rates, inventory shortages or inflation, our unit volume declines, which results in both lower revenues from dealers and OEMs with pay-per-sale billing arrangements, as well as a greater difficulty in justifying our value proposition to dealers, including dealers on subscription billing arrangements. Additionally, diminished lead quality or quantity often causes TrueCar Certified Dealers to be dissatisfied with our program, which increases the likelihood that they choose to leave our network or insist on lower subscription rates. 

Historically, some of our TrueCar Certified Dealers have expressed concern about our lead quality. For example, in 2020, the wind-down and subsequent termination of our affinity partnership with USAA Federal Savings Bank, or USAA, adversely affected both our lead quantity and quality. Additionally, during the first several months of the coronavirus pandemic, we noticed a substantial but temporary decrease in lead quantity, and since 2021, we have continued to experience relatively lower lead quality compared to the years prior to the pandemic. We believe that the lead quality and quantity challenges that we have experienced since 2021 are substantially related to the contemporaneous industry-wide automobile inventory shortages, which we discuss in greater detail 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” and other macroeconomic factors that impact automobile purchases such as inflation and interest rates. We cannot predict how further developments will affect our lead quantity and quality, and negative developments in these metrics have adversely affected our revenues, results of operations and business and may continue to do so in the future.

If we are not successful in rolling out new offerings, including our TrueCar+ offering, providing a compelling value proposition to consumers and dealers using those offerings, integrating our current and future offerings into such experiences or appropriately monetizing them, our business and prospects would be adversely affected.

We believe that our effort to fully build out our end-to-end consumer car-buying experience, TrueCar+, is critical to the success of our business. Through this initiative, we