Online Car Dealer Kickbacks

Many states, including California, have laws against car dealer kickbacks—where a third-party is paid by a car dealer for referring customers to that car dealer. For example, some online car referral services are alleged to have been induced by car dealerships to "recommend" or refer customers to those specific dealerships. Such California car dealer kickbacks are illegal, and companies or people who are involved in such schemes could be subject to car dealer kickback lawsuits.

In some cases, consumers in California may have been looking for a specific car and run an Internet car search to find the car they wanted. They may have been taken to a third-party car finder website, and then referred to a car dealership to go to for the actual purchase of that car. Some third-party car listing sites, however, have been accused of accepting inducements—often in the form of cash—from car dealerships for sending customers to their dealerships.

Furthermore, California consumers who purchased a car through an organization that uses a car buying service may also have been victimized by illegal inducements. For example, some organizations have car purchase member benefits that offer their members a "best price" on vehicle purchases if they use a car buying service. That service may also have been given car dealer kickbacks or inducements for recommending certain dealerships.


Consumers do not need to know that an illegal kickback or inducement was given to have been victimized by it--and more often than not may not realize that they have been referred to a car dealership as the result of an illegal dealer kickback.

Some attorneys and state regulators are investigating possible illegal kickbacks to online car referral company TrueCar. Among the states that have or are investigating TrueCar are Colorado, Louisiana and Virginia. Consumers would have visited the TrueCar website, entered the information for the type of car they wanted to buy and been referred to a local dealership for the best price on that vehicle.

If TrueCar acted as a broker, and received compensation as a broker, but did not have a broker license, it may have violated California consumer laws.

In addition to possibly receiving illegal kickbacks for referring customers, some referral companies are alleged to be involved in other online practices that violate California law, putting consumers at risk of being victimized by unethical companies.

In many cases, the consumer might not even be aware anything illegal or unethical has occurred. In fact, many purchasers are likely unaware of the alleged kickback to the referring company. This does not mean that they cannot join or file a lawsuit against the referrer.

If you bought a car in the past four years through a referring company, or through an organization that obtained a lower price on vehicles for members or employees, there might have been an unlawful kickback in your transaction.

Car Dealer Kickback Legal Help

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Last updated on Feb-15-13