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Auto dealers cannot engage in deceptive car selling practices or scams. Charging hidden fees or forcing you to buy “optional” add-on products or warranties is illegal. Dealers cannot force you to buy add-on products or warranties, or charge hidden fees.
If an auto dealer is making you buy something you don’t want, or charging hidden fees, we can help.
Buying a car should be a rewarding experience, whether you've saved for years or are working with a tight budget. Unfortunately, many buyers enter the process expecting a fair deal, only to be blindsided by mandatory add-on’s, bogus warranty products, junk or surprise fees, misleading advertisements, and hidden charges that inflate the final price. Some dealerships even resort to bait-and-switch tactics, advertising low prices that don't reflect the actual cost.
Don’t worry, we can help you. In fact, the Federal Trade Commission (FTC) is also taking steps to combat these deceptive practices. With new regulations in place, dealerships will now be held accountable for providing clear pricing, prohibition against mandatory add-on products and warranties, disclosing all mandatory fees upfront, and eliminating the fine print that often traps buyers. This move is a significant step toward making car buying more transparent and fair for everyone.
On July 30, 2024, the Combating Auto Retail Scams (CARS) Rule was officially enforced by the FTC. This regulation is designed to protect consumers and benefit honest dealers. According to the FTC, it is expected to save U.S. car buyers over $3.4 billion annually and reduce the time spent shopping for vehicles by an estimated 72 million hours each year. Here's what the rule means for car buyers:
Deceptive Pricing and Conditions
Auto dealers cannot force you to buy optional add-on products or warranties, and they can’t charge you hidden fees.
Car dealerships are required to provide transparent pricing by clearly stating the full price of a vehicle, known as the "offering price." They are required to tell you that add-on products and warranties are optional. They are required to communicate this information clearly and conspicuously. The price must include all costs and fees, except for mandatory government charges like taxes and license registration fees.
If a dealer gives you a quote based on monthly payments, they have to disclose the total price you'll end up paying for the vehicle.
And if they offer a lower monthly payment, they must let you know if that will increase the overall cost of the car.
Add-on Products and Services
Buyers have the right to refuse any add-on products, warranties, or services that are unwanted or provide no real value. For example, bogus warranties, protective paint coatings, window tinting, environmental protection packages, extended warranties, fabric protection, rustproofing, tire warranties, and more.
Additionally, dealers can't charge you for products and services that have no benefits, such as a GAP agreement that doesn't cover your vehicle, a duplicative warranty, or nitrogen-filled tires.
Informed Consent
Auto dealers cannot charge you for any item without first giving you all the facts and details about what it is and how much it costs, and whether it is optional. You must then give your clear, informed consent before moving forward with the purchase.
Informed consent helps eliminate deceptive practices, scams, and ensures there are no surprise fees, hidden tricks, or unwanted add-on products and warranties.
What Happens When an Auto Dealer Engages in Deceptive Practices?
If an auto dealer forces you to buy add-on products or warranties, charges hidden fees, or otherwise engages in deceptive practices or scams, we can help hold them accountable. We can file suit against the dealer, obtain money damages, and make you financially whole after this occurred.
In addition, violating any FTC Trade Regulation Rule, including the CARS Rule, can lead to significant consequences for a company. This may include mandates to alter their business practices, reimburse affected consumers, and pay civil penalties of up to $50,120 for each violation.
My Personal Experience with Dealership Scams
I recently had a frustrating experience while trying to purchase a vehicle for my family. We were looking for a car, and I spent months contacting dealerships across Kansas City, Lawrence, and St. Joe.
But, nowadays, because buying a car is more challenging, it was difficult to find a suitable car due to alleged post-pandemic shortages. After months of searching, however, a dealer informed me they had a vehicle available. However, when I was about to finalize the deal, I was told the price was higher than advertised, and that I was required to purchase an unwanted add-on product and warranty for several thousand dollars. It was a classic scam—a deceptive practice. It is illegal.
I pushed back, saying we didn't need the warranty. Their response? “Then, you're not getting the car.” The dealership outright refused to sell the car unless I bought the unnecessary add-on product. They even admitted, 'We've got to make money too’. This was a clear scam and a violation of the new CARS rule, prohibiting dealerships from forcing buyers to purchase optional products and requiring transparent disclosure of all charges.
I've since learned that the dealer has been involved in similar practices for some time. This experience underscores the broader issue of dealership fraud, and with these new regulations, I hope buyers will be able to catch these practices and prevent themselves from being scammed before it happens.
Class Action Lawsuits Against Car Dealerships
As an attorney at Popham Law Firm, I have witnessed the difficulties consumers encounter when dealing with dealership deceptive practices, dealer fraud, and car buying scams.
Further, our experience in holding car dealers accountable underscores my deep concern about car buying and dealer deceptive practices fraudulent behavior in the industry.
I am hopeful the new CARS Rule will help consumers become more aware of their rights. However, many dealerships continue to engage in deceptive practices, and I am dedicated to holding these dishonest dealers accountable.
If you or someone you know has fallen victim to auto retail or car buying scam, we're here to help. Let us review your case and guide you on the best steps to take. Contact us at (844) 243-2288 or use our online contact form.
