DRIVERS should look out for five ways in which dealerships could be adding on extra, unneeded charges to the price when buying a car.
There are multiple ways dealerships may be running up prices for unsuspecting buyers to increase revenue.
Buyers across the nation should be aware of bait-and-switch tactics used to run up the price tag in particular.
Bait-and-switch is defined as a low, fake car price online that racks up once a driver steps foot on the dealership.
There are a variety of ways sellers do this.
Fake fees, superfluous add-ons and overly-expensive costs are all examples of how prices may be driven up at the dealership.
Seventy-one percent of used car purchases had a hidden fee that was either “illegitimate” or “excessive,” according to CoPilot, a car purchasing company.
The average price of said hidden fees are around $640, racking up tons of revenue for sellers.
Every year, $11.8 billion in these fees are added to final sales, according to the company.
Although there are fees that may be real when buying a car, it’s important to be aware of the tactics used.
Some of these additional price add-ons could be a license fee, which are the most expensive for buyers, a plate fee, transportation fee, title fee, or doc fee.
Some of the most excessive add-ons for buyers are etching, wheels, and lock fees – which costs buyers on average $1,795 – alongside reconditioning, and exterior paint protection.
The easiest way for sellers to avoid bait-and-switch includes having accurate prices online so customers know exactly how much the final bill will be.
Prices continue to rise for cars, with the average price up 29% since the Covid-19 pandemic.
The best way for buyers to avoid the excessive costs are to reach out to the seller before going to the dealership; look at the fee breakdown to see what’s being added; and look at the average prices for these specific fees, like the licensing one, per state.
How to spot add-on fees at the dealership
The Federal Trade Commission is cracking down on dealerships that charge buyers unfairly.
However, as many transactions aren’t spotted due to electronically signed documents, many added-on fees aren’t spotted. Here’s how the agency says you can spot them.
- Demand a physical copy of the sales contract or invoice, and read it carefully. Customers aren’t required to pay for add-ons they don’t want, like nitrogen-filled tires, paint protectant, wheel and tire insurance, etc.
- Be sure you understand the total cost, not just the monthly. Make sure the total cost is in writing so you can get an idea of how other fees play into the monthly fee. If it’s different from what you originally agreed on, the dealer may be adding fees.
- Explore your options for financing. First, check with your bank, as they can give better rates on auto loans depending on your credit. Bring a hard copy of your preapproval notice to entice the dealer to meet or beat those terms.
- If you’ve been charged illegally, the FTC encourages you to report it.
Source: FTC
Bait and switch tactics aren’t the only way drivers are spending more behind the wheel.
Car renters are angry after they claim that AI-powered checking technology may be adding extra costs for damage that doesn’t exist to their rental cars.
The tech takes photos of all parts and angles of the car before it leaves the lot, to after its return.
Staffers then review the damages, and can add fees.
One driver, Adam Foley, claimed that he got a $285 bill for small spots on his rental, according to the Daily Mail.
“It’s a shakedown that is extremely off-putting,” he said of the incident.
Other drivers reported that fees were added after they used the wrong photographs of the cars.
One rental company, Hertz, has plans to send out scanners to 100 airports across the United States by the end of 2025.
