Consumer Alert

FTC Rules Don't Matter to Car Dealerships

The Double-Dip: How Dealerships Are Hiding Fees in Plain Sight

The FTC told dealerships to stop hiding fees. Some of them found a new trick instead.

The FTC just told car dealerships to stop hiding fees. So what did some of them do? They say the fee is included in the price, and then charge it again on the paperwork anyway. Dealerships will pretend to follow the law, but behind closed doors, they'll do anything they can to claw back every dollar from buyers.

I found two that are doing it right now. Let me show you how it works.

What the FTC Said

Earlier this year, the Federal Trade Commission sent warning letters to auto dealership groups across the country. The message was simple: the price you advertise has to be the price people actually pay. That means every mandatory fee (doc fees, processing fees, dealer prep, whatever you want to call it) has to be baked into the number on the ad. The only things dealers can leave out are government charges like tax, title, and registration.

This isn't a suggestion. The rules are clear. But not everyone got the memo. Or maybe they did, and they're trying to get creative with it.

The Double-Dip in Action

I found two dealerships doing something that, on the surface, looks like compliance, but when you dig into the actual numbers, it's the opposite. Here's how it works.

They advertise a vehicle at, let's say, $48,300. And right there in the ad, they tell you that the price includes the $800 dealer fee. Sounds great, right? Transparent. Exactly what the FTC is asking for.

The advertised price, claiming the dealer fee is included.

But then you sit down to do the paperwork, and look at what you see:

The paperwork: the fee is being charged on top of the advertised price.

They're advertising $48,300 as if the fee is included, then on the paperwork charging $48,300 for the car and stacking the fee on top. You're paying $49,100 for a car that was advertised at $48,300 with the dealer fee of $800 already included.

It's a double dip. They're using the language of transparency to actually charge you more.

Most consumers won't catch this. Most consumers don't scrutinize every single line of paperwork like we do for our clients. We caught this before our client stepped into the dealership, called it out, were told "oops," and it was fixed.

After we called it out: the corrected paperwork.

Same Day. Different State. Same Trick.

And it wasn't just this one dealership. The very same day, two states away in New York, a Toyota dealership was advertising their car for $27,997 including their $175 dealer documentation fee. But when we received the paperwork before our client went to the dealership, sure enough, the car's sale price was $27,997 plus the $175 dealer fee.

The Toyota ad: dealer doc fee "included" in the price.

The paperwork: the fee stacked on top anyway.

To the credit of both dealerships, they fixed the issue without fighting or arguing. Just an "oops" and it's fixed. But how many people are not reviewing their paperwork? How many people are getting charged an extra $800 they shouldn't be paying?

Why This Is Worse Than the Old Way

This is exactly what the FTC is cracking down on. One of the core requirements from those warning letters is that advertised prices have to match the actual prices charged to consumers at the point of sale. If your ad says $50,000 with fees included, then $50,000 is what you should pay before tax and registration. Period.

What these dealerships are doing is arguably worse than the old way. This new version wraps the bait-and-switch in the language of honesty. They're telling you the fee is included to build trust, and then charging it twice.

How to Protect Yourself

If you're shopping for a car without professional help, here's what I'd tell you:

• 1 Always ask for an out-the-door number before you commit to anything. In writing, before you step foot in the dealership, you should obtain the total you'll pay: including every fee, tax, title, and registration. Get it in writing or in a text.
• 2 Compare that number to the advertised price. If the ad said fees were included and the final price is higher, that's a problem.
• 3 Screenshot everything. The ad, the breakdown, the paperwork. In a world where the FTC is actively monitoring and filing lawsuits, documentation is your best friend.