TrueCar is acquiring ALG for $83 million.

Internet start-up TrueCar.com will invest $83 million to acquire ALG, a data service that is the gold standard for the automotive industry when it comes to establishing such things as what a car is expected to be worth at trade-in or when its lease expires.

The acquisition of what was originally known as the Automotive Lease Guide is expected to significantly enhance the capabilities and credibility of TrueCar, an upstart website and service that has challenged the traditional online method of both providing consumers with automotive pricing and helping dealers and manufacturers connect with buyers in the final stage of picking a new vehicle.

“We’re committed, first and foremost, to transparency when it comes to accurate market data,” said TrueCar CEO and founder Scott Painter, and he expects that the extensive research capabilities of ALG will continue to improve TrueCar’s own services.

Painter was a pioneer in online automotive sales, helping found the early service CarsDirect, among other projects.  He later attempted to form a company, known as BTO – short for Build-to-Order – that would produce cars specifically to customer orders rather than pushing them out of the plant and onto dealer lots.

Founded in 2008, TrueCar has focused on what industry insiders call the “bottom of the funnel,” assisting consumers looking to find an accurate source for pricing information, including not only what to expect to pay for a specific model, but what the real cost is to a dealer for that product.

Painter also hopes to become a more significant source of information to the industry itself, a goal that should be significantly enhanced by the acquisition of ALG.

“It’s the bible at the dealer level,” the TrueCar CEO said, noting that few other sources are more regularly sourced to help determine what to charge for a lease.  Determining that figure is critical – and difficult – because it assumes having a good estimate of what a vehicle will be worth in 24 or 36 months, for the typical lease.

“When you get it wrong, you’re wrong by a mile,” added Painter.  Estimate too low and the lease may cost too much, driving away potential customers.  Too high and the dealer or manufacturer could be stuck with a big loss at the end of the lease.

The sale could raise questions about ALG’s future integrity, Painter acknowledged, though he insisted his goal is to learn from the acquisition, rather than the other way around.  And, he added, “The industry will know in two seconds if we’ve tampered with ALG’s formula.”

TrueCar has been aggressively fundraising and expanding its operations.  It recently announced that Mike Maroone, second-in-command at industry giant dealer network AutoNation has signed on as a new board member.