Consumer Reports Gets Into Car Sales Business

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.

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.