Consumer Reports Gets Into Car Sales Business

By Douglas A. McIntyre Updated Jan 12, 4:28PM EST · Published Dec 23, 8:45AM EST

Follow 24/7 Wall St. on Google

This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.

Consumer Reports Gets Into Car Sales Business — © Thinkstock

Consumer Reports claims it is financially independent from the products and services it evaluates. Its relationship with the car industry has become very close, however. The nonprofit has set up a system whereby its subscribers can get discounts on vehicles, but only from “participating dealers” that are part of the Truecar Inc. (NYSE: TRUE) dealer network. Truecar makes money on these transactions. So does Consumer Reports, which only offers the service to subscribers. The organization says the money from the transactions goes to supporting its testing programs.

In its promotion, the nonprofit’s management says:

If you’re planning to buy a new car, be sure to use the Consumer Reports Build & Buy Car Buying Service. You can get subscriber discounts on new cars, and see upfront pricing information from Participating Dealers before heading to the dealership. More than 150,000 car shoppers have purchased a vehicle using the Consumer Reports Build & Buy Car Buying Service. Take a look at the average savings on a selection of popular brands and visit the Build & Buy Car Buying Service to see how much you can save on the car you want.

The list of manufacturers included in the program is long and includes dealers for BMW, Mercedes, Honda, Toyota, Kia, Mazda, Hyundai, Subaru, Nissan, Ford, Volkswagen, Chevrolet and Jeep. In other words, most of the manufacturers that sell cars in the United States.

[nativounit]

Some of the discounts are significant. Consumer Reports savings compared to the manufacturer’s suggested retail price (MSRP) of Jeeps is $4,542 on average, $4,788 on Nissans, $4,025 on Kias and $4,767 on Fords. One example of how aggressive the discounts are is the pricing for the Ford F-150, which is America’s best-selling vehicle. In some parts of the country, the “estimated guarantee savings” on the base model is $5,642 off an MSRP of $27,735.

It is easy to understand why dealers, manufacturers and Truecar want to be part of the Consumer Reports program. Why the independent nonprofit wants to be is another matter.

[wallst_email_signup]

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.