Honda spars with TrueCar over vehicle pricing

Honda is drawing the line when it comes to online vehicle pricing.

A growing percentage of new car buyers are turning to Internet shopping sites to make the purchasing process a little easier, but Honda is making things a little more difficult by threatening dealers that advertise prices below invoice.

TrueCar.com has emerged as a leading online car shopping source, but the site's ability to advertise Honda vehicles has been reduced in recent months. The Japanese automaker has warned dealers that posting a Honda vehicle on TrueCar for less than the vehicle's invoice price could result in financial penalties.

"They're trying to say Hondas are worth more than invoice, but if everybody's paying less than invoice, that's not true," TrueCar CEO Scott Painter said.

Honda typically sends its dealers payments between 1 and 2 percent of a vehicle's sticker price for local marketing efforts, but the company has warned that any dealer advertising a vehicle for below invoice could miss out on that compensation. Honda cites brand equity preservation as the reason for the policy.

Painter says Honda sales through TrueCar have declined since the automaker announced its ultimatum in October, but failed to reveal by how much.

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