California New Car Dealers Association announced on Thursday that it settled its lawsuit against TrueCar Inc.
The Sacramento-based trade group, representing more than 1,100 of the state’s new-car and -truck dealers, had accused the Santa Monica–based online car shopping service of operating as an auto dealer and broker without a license from the Department of Motor Vehicles in a 2015 lawsuit. Dealerships have in the past boycotted TrueCar, fearing its business model – which helps shoppers compare regional car prices – encouraged price wars among dealers vying to underbid each other.
As part of the settlement, TrueCar has agreed to transition its billing model in California from a pay-per-sale model with a cap to a flat-fee subscription billing model by Jan. 1, 2019. It also agreed to double the indemnification that it provides to California dealers who participate on the TrueCar program.
“TrueCar is pleased that the litigation has been resolved to the parties’ mutual satisfaction, and we look forward to continuing to serve our dealer customers in the State of California,” said Chip Perry, chief executive of TrueCar, in a statement.
Technology reporter Garrett Reim can be reached at email@example.com. Follow him on Twitter @garrettreim for the latest in L.A. tech news.