When car shopping, you shouldn’t be charged more than the advertised price, or more than other people because of the way you look or where you’re from. That’s wrong, dishonest, and illegal. Today the FTC announced a lawsuit and settlement with a dealership and its owners for allegedly doing just that. Now they have to pay $3.3 million to refund people harmed by their actions and change their allegedly deceptive and unfair practices.
The FTC says that Passport Auto lied to customers about car prices: for example, it regularly advertised a car for one price, but charged more when customers went to buy it. According to the FTC, the dealer illegally added additional fees for things that were already included in the advertised price, like certification, reconditioning, and inspection. But the law says they can’t do that.
If you’re in the market for a car, your options may be limited by things like supply or your budget. So that dealerships don’t take advantage:
- Bring the ad to the dealer. Be sure the dealer honors the advertised price.
- Shop around for financing. Dealership financing often comes with marked-up interest rates. It’s not your only option. Start with banks, credit unions, and other financing companies.
- Read the sales quote and financing agreement carefully. Do the terms you agreed on match the ones in the contract? Get answers about any extra fees you don’t recognize.
- Walk away if you’re not getting what you were promised. You don’t have to take the deal if you’re not satisfied.
Also, says the FTC, the dealer illegally charged Black and Latino consumers more in junk fees and financing markups than White consumers. Markups are charges dealers add on top of the interest rate when they arrange financing. The Equal Credit Opportunity Act makes it illegal to discriminate based on things like race, national origin, and age, among others.
For more advice on car buying and financing see ftc.gov/cars. Report bad business practices when you see them at ReportFraud.ftc.gov or in Spanish at ReporteFraude.ftc.gov.
The purpose of this blog and its comments section is to inform readers about Federal Trade Commission activity, and share information to help them avoid, report, and recover from fraud, scams, and bad business practices. Your thoughts, ideas, and concerns are welcome, and we encourage comments. But keep in mind, this is a moderated blog. We review all comments before they are posted, and we won’t post comments that don’t comply with our commenting policy. We expect commenters to treat each other and the blog writers with respect.
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Great Job Thank You.
thank you for all the great information you give us all, and very disgraceful that people do these acts, great job in getting them!!
A Chevy. Dealer in Cocoa, Fla. Gave me a price on a new Corvette, They said the asking price so far is $24,000 Over Sticker price !!
Doing the good work, fighting the good fight! Thank you !
I wish I knew when I financed by the dealer's office when I bought an used car in Nov. 2019. The dealer's financing guy told me that official detailed information when I asked him about interest rate and coverage, and etc. He also told me no down payment was required. I found out later the financing bank was charging me per day at 6.5%(approx), and get into the whole entire what I borrowed. I figured I could not be able to pay if I pay as scheduled. And, I paid in all within about 6 months. It's such a bad deal.
In reply to I wish I knew when I… by Noriko
If you feel that you were wronged, you can report the situation at www.reportfraud.ftc.gov.
Thanks. Very educational.
FTC, thank you for this article! My car contract has 5 different prices along with unnecessary fees. I am definitely about to go after them now!
Thank you FTC for the "Heads Up " on this topic...In attempts for surviving the pandemic has been challenging, to say the least, for most..but you're article today, points out the continual greediness of society, in ALL FORMS! Greatly appreciate your daily updates and what's most important in today's rollercoaster consumer living conditions.
I'm 67 years old and have experience 100 times being discriminated against buying car or big ticket items. Now there's something we can do. Thanks
I am so glad to see finally something being done. I believe when I purchased my car that happened to me, the priced changed when I got to the dealership
Please look into South shore mitsubishi of Freeport, NY. I was deceived, tormented, and defrauded by them. Now I really need help cause I also believe that Capital One Auto Finance played a part in the deception.
In reply to Please look into South shore… by Monique
You need to file an official report with the FTC!! Get it done and get the action rolling.
I bought cars from a dealer because the price the quoted is what I paid. Car, Taxes, and title transfer that was it nothing more. The owner died and another company took it over wanting all kinds of fees and yes, I did walk out with the salesman following me to the door begging me he would change some fees. This company went out of business with in about three months, hum wonder why.