In December 2023, The Federal Trade Commission’s
(FTC) finalized the Vehicle Shopping Rule (known as the "VSR or" “CARS
Rule”).
The CARS/VSR Rule is currently tied up in court by two special interest auto
trade groups. But if the FTC prevails, it will prohibit dealers from using bait-and-switch claims to lure
vehicle buyers to the lot, including about the cost of a car or the terms of
financing, the availability of any discounts or rebates, and the actual
availability of the vehicles being advertised. It also tackles hidden junk fees
– charges buried in lengthy contracts that consumers never agreed to pay.
As of 6/30/2024, legal briefs have been filed, but don't expect federal-national
protection until the case is won or settled. However, if you're lucky, your
state may offer additional protection just as Georgia does!
So you really dig the Honda Civic you saw advertised for $7100
online. But at the dealership you suddenly learn its take home price is
now $8100. This really happened to me and I was furious. Turns out, the
sales guy wanted to charge me an additional $599 “dealer fee” along with
the taxes and title fees.
So what are dealer fees?
Can car dealers legally tack them on
to the price they advertised? The answer to the last question is
NO. This practice is totally illegal in Georgia (See
dealer fee restrictions in GA and other states).
A dealer’s fee is nothing more than a clever way for a car salesman
to grab your money. Dealer fees may show up as “administrative fees,”
“document fees,” “processing fees,” or “customer service fees. They
could also be called
reconditioning
or “recon fees”, or “protection fees” etc. It’s all left to
the car dealer’s imagination. Bottom
Line: A dealer fee is any non-governmental fee a car dealer tacks on.
Dealer fees are not per se illegal. Georgia law allows car dealers to
charge whatever they like for these fees. But here’s the catch!
It’s TOTALLY ILLEGAL to advertise a price and then tack these fees on
later. THAT’S RIGHT! The price they show you must include any and
all dealer fees or they’re ripping you off! This pricing requirement
extends to any advertised price in any medium. So if they advertised the
car for $7100, the law says this price must include all dealer fees. The
car dealer can’t slip them in later. Even
if their website disclaimer says “price does not include dealer fees.” So if
Stone Mountain Toyota
decides to show you a computer screen showing the car’s price, they’ve
published it! The only fees they can add to this price are the fees they
must pay the government.
Other types of charges that MUST be included in the vehicle’s
advertised price include
“freight charges”, “transportation charges”, “destination charges”,
“dealer preparation charges”, “overhead charges”, and any
other terms of similar import.
Fees New and Used Car Dealers Don’t Have To Include In The
Price The only fees dealers DON’T have to list in
the advertised price are government fees, which include
tax, tag, title, Georgia Lemon Law, and
Warranty Rights Act (“WRA”) fees. The GA Lemon Law fee is just $3
and applies only to new vehicles.
So be sure to ask the car salesman “What’s
the full price when I walk out the door.” And don’t let them get
away with tacking on dealer fees not already included in the advertised
price.
How To Verify You’re Not Being Overcharged For Government
Fees If government fees are being added to the price of the
car, be sure to ask what each fee is for and how it was calculated. You
can ask them “Is this the exact amount you
pay the government or is it more than that?” If the dealer
inflates the title fee or tax amount, it’s nothing but an illegal dealer
fee in disguise.
Don’t confuse the government’s title fee of $18 with the more
expensive “Titling Fee” often
charged by new and used car dealers. The latter is often five times the
amount charged by the state. So the dealer’s titling fee also needs to
part of the published price of the car. It can’t be extra.
Government Fees The Dealer Can Add To The Price Of The Car
Ad Valorem (Sales Tax): To know the exact taxes the dealer must pay,
simply enter the car’s vehicle identification number into the Georgia
Department of Revenue’s
Ad Valorem
Calculator.
Examples of Legal And Illegal Dealer Fees
ILLEGAL The car is advertised
for $7,100 with a $600 dealer fee not included. But a big
disclaimer says THIS PRICE DOES NOT INCLUDE DEALER FEES”.
Illegal (all dealer fees must be
included in price).
LEGAL An old beat up car is
advertised for $7,100. Price includes dealer service charge of $599
and “title service” fee of $198. Legal
(both fees are steep but allowed because they are part of the
car’s published price and not added as an extra fee).
ILLEGAL The car is advertised
for $7,100. Price includes dealer service charge of $599
but not title service
fee of $98. Illegal as the actual
title fee charged by the government is less than $98 (dealer fee in
disguise).
The Advertised Price Must Include Options Already
Installed or Those Things “You’re Required To Have” to Buy The
Vehicle
ILLEGAL “A dealer policy
where all new vehicles must receive a paint protection package and
vehicle floor mats for an additional $1,000. (illegally forces you
to pay an extra fee beyond the published price or you can’t
buy the vehicle).
ILLEGAL A car dealership
website invites you to click a button on the website, and
communicate with your dealership in order to receive a special
“E-Price.” This “E-Price” does not include your mandatory dealership
fee which is tacked on later. The “E-Price” must include all
required non-government charges, including your dealer fee,
according to The Georgia Department of Law-Consumer Protection Unit
(CPU).
ILLEGAL
“This car has a GPS built in so you need to pay an additional $200
beyond what was advertised.” Not by a long shot! Like any
other dealer fee, if this option is already installed,
this “dealer addendum charge” must be included in theadvertised vehicle price.
So when the dealer gives you a line on
how “the rules require” a particular option to be installed, or “it has
already been installed”, you get to tell them, “Great! The rules also
say it’s you who will eat the cost! Now remove the charge!”
Negotiating The Best Deal With Your Car Dealership (and convincing them not to back
out once you expose them)
If you tell the sales person upfront about the illegal dealer fees,
two things may happen:
The dealer may not sell you the car;
The dealer may remove the illegal dealer fees but then jack the
price up with other fees/offer you second rate discounts. For
example: To recoup their losses, the dealer could decide to lower
the price of your trade in, give you a terrible deal on auto
financing and warranties, or jack up their insurance or other
service products.
To be safe, DO NOT OBJECT TO THEIR ILLEGAL FEES UNTIL THE END WHEN
THE DEALER HAS PRESENTED YOU WITH THE PAPERWORK LISTING
ALL THEIR DISCOUNTS AND
CHARGES. Yes, ask to see their final paperwork so that you know your
absolute takeaway costs.
This is the time to make sure the
dealer won’t back out when you expose them. They may try to do so simply
because the deal is no longer a moneymaker. To ensure the deal goes
through:
Circle the illegal dealer fees, illegal add ons, and anything
else illegal;
Quickly take a photo of the finance page with your circles:
Make sure to get their logo or
anything else that proves this is from theircar dealership;
Object to the fees, and give the dealer the 3 pre printed,
highlighted copies of the GA Department of Law pamphlets (old Name
for GA Consumer Protection Division) found in
this blog under the Georgia Law section (listed
under YOUR TOOLBOX: Helpful Resources)
Better yet: Use their business card
to email or text them. Be sure
to attach the snapshot of the illegal fees along with the links to
the GA law brochures. (might get the sales person personally on the
hook by proving they knew of the illegality.)
If the dealer still won’t sell you
the car, no need to raise your voice or make empty threats.
Simply explain that they are all on legal notice. They have wasted
your valuable time, padded the bill with almost a thousand dollars
in illegal fees, and you need to warn the whole state of GA so they
won’t become victims. IF YOU WON’T SELL ME THE CAR SANS THE ILLEGAL
FEES, I’LL SIMPLY SPREAD THE WORD BY SENDING THIS TEXT/EMAIL TO THE
GA CONSUMER PROTECTION DIVISION, THE BBB COMPLAINT DATABASE, FOX 5, and WSB
NEWS. I’LL ALSO SEND IT TO THE VARIOUS AUTO FRAUD CLASS ACTION
ATTORNEYS WHO WILL ADVERTISE THIS ONLINE SO THEY CAN ROUND UP ALL
THE OTHER VICTIMS AND SUE YOU FOR MILLIONS.
THE CHOICE IS YOURS BUT PLEASE DECIDE IN THE NEXT FIVE MINUTES.
I’VE WASTED ENOUGH TIME HERE.
Help For Victims Who Were Cheated with Illegal Dealer Fees
You’ve heard that the bigger they are, the harder they fall. Well,
mamma was right! Big companies including car dealerships are extremely
sensitive to bad publicity.
But it’s best to use a flyswatter before you use dynamite. Your first
step should be to contact the general manager and get them to fix the
problem. After all, if you were in charge, wouldn’t you want people to
come to you first, rather than go over your head?
For example: Say you were cheated by a dealership like Nalley Infiniti
or Stone Mountain Toyota, and the general manager doesn’t return your calls.
These dealerships have to worry not only about their own reputation, but
also about the reputation of Infiniti or Toyota (which allows them to sell
their brand name cars).
So in the above example: if the franchise finds out the dealership is
besmirching their good name, guess what happens? It means that the
dealership could lose their right to sell Toyotas or Infinitis! That would
cost them a lot more than a thousand dealer fees.
Keep that in mind if you think the dealership is not playing fair with
you.Your next step may be to call
Toyota’s or
Infiniti’s pubic relations department. You can bet they’ll be keenly
interested in what the dealer is doing with their good name. (In case
you’re wondering, Infiniti is owned by Nissan; Toyota Stone Mountain is
owned by Sonic Automotive.)
If this doesn’t work, try your
local TV station for even more exposure. Be sure to Google if the car
dealer has had prior complaints. Reporters eat this up. You can also
lodge a complaint with the Better
Business Bureau. A little bad press can give your dealer a seven
figure lesson on freakenomics.
Finally, if you’re really really mad, find a
class action lawyer who will gather other angry plaintiffs who have also
been cheated.
I’d do this last, because if it were me, I’d first sue in the court of
public opinion so the dealership would immediately lose millions and
millions. But if you simply want your money back, it may be worth your while
to deal with them pesky lawyers.
Getting Proof They’re Cheating Others It’s always
good to have proof this is not an isolated incident. After all, repeat
offenses could peak the interest of the media or your
U.S. or local representative. First try Googling the
name of the dealership with any of the
following words: Complaint BBB Fraud
Deceptive
Also, be sure
to monitor your dealer for further wrongdoing through Google Alerts.
Yes, you can create a Google Alert
with the same terms as above so future complaints appear in your email in
box!
Next, fax an open records request to
the Georgia Attorney General's Consumer Protection Division so they can email you a printout of any
allegations of fraud against the dealership. You can fax (not email or text)
these requests to 404-651-9018. If the request is simple, they’ll
email you the results in just 3 business days. (free of charge). I just
verified this with a lawyer who works there!
Sample FAX of an Open Records Requests “In regards to Gravity Auto throughout the state of GA, please send
me a list of all complaints against them in the last three years
(formal or informal, substantiated or merely alleged) that involved
deceptive pricing.”
“In Regards To Nalley Infiniti, please list any fines or settlements in
the last three years that relate to deceptive practices.”
Making The Story More
Newsworthy
Aside from how you were cheated, your story will gain more traction if
you can show reporters that virtually every driver has or will become a
victim.
The facts and figures below show the number of people who buy new and
used cars from dealerships, and how much $ the dealerships make from selling
these cars. Dishonest dealerships are a problem for everyone. This issue
affects the rich, the poor, the elderly, the disabled, immigrants,
democrats, republicans, the black, the white, Latinos and anyone who buys a
new or used car from a GA dealer.
Your Toolbox: Helpful Resources Below To Stop False or
Misleading Car Dealers and Crooked Auto Dealerships
Georgia Law
Georgia Attorney
General's Consumer
Protection Division (Formerly The GA Dept. of Law) 404-651-8600
Complaints filed with this office alleging fraud may form the basis for an
investigation into a company’s business practices. A significant quantity of
complaints about a business may give rise to legal action—not on behalf of
the individual complainants, but to enforce state law.
Georgia Auto Informer Government Pamphlets Below
Previously known as the
Georgia Department of Law-Consumer Protection
Unit, the GA AG's office enforces the Georgia’s Fair
Business Practices Act (FBPA) which prohibits
unfair and deceptive acts or practices
within the context of consumer transactions.
These news letters are part of their efforts to raise awareness among
auto dealers and advertisers regarding the FBPA, as well as the
GA Government’s Auto Advertising and Sales Practices Enforcement Policies
(AAEP). Although the policies found in the AAEP are not actual law,
they highlight those industry practices that
the GA government considered to be unfair and deceptive, and thus violations
of the FBPA.
What’s The Deal With Dealer Fees (Government Pamphlet Issue #12)
Governor’s office of Consumer Protection newsletter: a dealer’s claim of
ignorance or confusion regarding this matter will not mitigate OCP’s actions
for noncompliance. In 2013, Fox 5 Atlanta conducted numerous
undercover visits to Atlanta area dealers in order to investigate dealer
compliance with this policy. All of the dealers visited during these
undercover shops were adding fees to advertised prices.
Pricing Representations: Dealer Fees, Options & Discounts
(Government Pamphlet issue #13) 1/22/16 Georgia Department of Law’s new
bulletin: Advertised vehicle prices must
include all non-government charges that a consumer is required to pay
in order to purchase a vehicle, including
but not limited to, dealerfees,
previously installed dealer options, and
electronic titling fees. Only
taxes, tag, title, and Lemon Law fees
may be added to this price. This pricing requirement extends to
any advertised price in any medium, but
most commonly becomes an issue on your dealer website or a third party site
such as Autotrader.
GEORGIA DEPARTMENT OF LAW: AUTO ADVERTISING AND SALES PRACTICES ENFORCEMENT
POLICIES (2007) Learn how the GA Dept of law determines what is
deceptive and illegal in regard to automobile advertising and auto sales.
This agency enforces the Fair Business Practice Act (FBPA) which protects
consumers against tacking on to the sales price, things like illegal dealer
fees, and dealer add ons, like “mandatory safety treatments”, etc.
GA Law On Mandatory Arbitration Clauses (Forum Selection Clauses) In
2022 it was still touch and go. The courts still have some leeway to decide
that a clause forcing you to arbitrate (forbidding court or a class action
law suit) are void. And some dealerships do not have these clauses in
their contract anyway. Every case can turn on the facts, the judge or
the jurisdiction. So consult an experienced GA class action attorney.
Select Dealerships: (Their Public Relations and Franchise Owners)
FOX 5 Call For
Action 404-879-4500 Monday through Friday from 11 a.m. to 1 p.m
Volunteers at Fox 5 Call for Action center try to resolve your problem by
calling the bad auto dealer to work it out. Bad car dealers may want to
respond to them, because if, not, their story could soon be on FOX news. Be
sure to explain to the volunteer how many millions this affects so the story
will interest a reporter, This will help the volunteer feel more confident
to forward your story to a reporter if the car dealership remains
uncooperative.
ProPublica (Investigative
Jounalism for the Public Interest) Nicole Carr
(She’s done prior news stories on crooked car dealers-previosuly worked for
WSB TV)
AutoDealer
(Publishes Deceptive Car Dealership Practices) Use them to give the dealer
negative publicity, or to explain to the dealer what you will do if they
don’t play fair.
GA Class Action Lawyers (Lawyers For Auto Fraud) Even if you’ve been
cheated only a little bit, the dollars add up when thousands like you have
also been defrauded. Class action lawyers can file a mega lawsuit that
punches the crooked dealer in the pocket book. Car dealers must learn that
charging illegal doc fees, security fees and other illegal markups ain’t
worth the trouble.
