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, natural 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.
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