When buying a car, it’s common for dealerships to offer a range of add-ons, such as service contracts, maintenance agreements, or special paint coatings. While these extras might appeal to some buyers, they can also add up quickly and significantly increase the overall cost of the vehicle. However, if you decline these optional add-ons, you should not have to pay for them. Unfortunately, the Federal Trade Commission (FTC) has recently taken action against three car dealerships in Texas owned by Asbury Automotive for illegally charging customers for add-ons they did not want or agree to.
What Did Asbury Automotive Do Wrong?
According to the FTC, Asbury Automotive engaged in deceptive practices that resulted in many customers unknowingly paying for unwanted add-ons. The FTC reports that up to 75% of Asbury Automotive’s car buyers experienced unauthorized charges for these extras. This was accomplished either by sneaking the add-ons into the sales contracts without the customers' knowledge or by falsely telling buyers that the add-ons were mandatory, which was not true.
Even more concerning, the FTC found that Asbury Automotive discriminated against Black and Latino car buyers by charging them hundreds of dollars more for the same add-ons compared to other customers. This discriminatory practice not only violated federal law but also highlighted the unethical and illegal tactics used by some dealerships to maximize profits at the expense of consumer trust and fairness.
How Did Asbury Automotive Conceal These Charges?
The FTC’s investigation revealed that Asbury Automotive used several deceptive tactics to conceal these unwanted charges. One of the most egregious methods involved the use of electronic devices that displayed only the signature lines for the sales contract, without showing the full terms and conditions. This made it nearly impossible for buyers to review the complete details of their contract at the time of signing, leaving many unaware of the additional fees until after they had driven off the lot—if they noticed at all.
Such practices are not only unethical but also illegal. The FTC’s action against Asbury Automotive serves as a reminder that car buyers must be vigilant and proactive in protecting their interests during the purchasing process.
How to Avoid Overpaying for a Car
While it’s disheartening to learn about such deceptive practices, there are steps you can take to protect yourself from overpaying for a car and falling victim to similar scams. Here are some tips to help you avoid unnecessary charges and ensure that you only pay for what you want:
Read the Sales Contract and Financing Agreement Carefully
Before signing any documents, make sure to read the sales contract and financing agreement thoroughly. Ask the dealership for a printed copy of the contract to review at your own pace, and ensure that the terms match what you agreed upon during negotiations. Pay special attention to any additional fees or add-ons listed in the contract. If you see charges you don’t recognize or didn’t agree to, ask the dealer to explain them. If the charges are for add-ons you don’t want, insist that they be removed.
Know Your Total Cost, Not Just the Monthly Payment
It’s easy to get fixated on the monthly payment when buying a car, but it’s crucial to understand the total cost of the vehicle, including all fees, taxes, and add-ons. Dealers sometimes try to make the monthly payment look more attractive by extending the loan term or adding hidden fees to the overall price. Always get a breakdown of the total cost in writing and review it carefully to ensure that it includes only the charges you agreed to. This will help you spot any unauthorized add-ons and avoid paying more than necessary.
Shop Around for Financing
Many car buyers rely on dealership financing without realizing that it often comes with marked-up interest rates. While it may seem convenient, it’s not your only option. Before visiting a dealership, consider getting pre-approved for an auto loan from a bank, credit union, or other financing company. This gives you a clear idea of what you can afford and provides a benchmark to compare against the dealership’s financing offer. If you get pre-approved, you can use that offer as leverage to negotiate better terms with the dealer or opt for the external financing if it offers a better deal.
What to Do If You’ve Been Overcharged
If you believe you have been charged for add-ons you did not agree to or if you feel you have been discriminated against, you have the right to report these practices. The FTC encourages consumers to report any suspicious or fraudulent activity to help protect others and hold businesses accountable. You can file a complaint with the FTC at ReportFraud.ftc.gov.
Conclusion
Buying a car should be an exciting experience, not a stressful one filled with hidden fees and unwanted charges. By being informed and vigilant, you can protect yourself from deceptive practices and ensure that you only pay for the add-ons and services you truly want. Remember, car dealerships cannot legally charge you for add-ons you have declined. Always read your contract thoroughly, know the full cost of your purchase, and shop around for financing to secure the best deal possible. Your diligence is your best defense against scams and unfair practices.
Disclaimer: This blog post is intended for informational purposes only and does not constitute legal advice. The content is based on current laws and practices, which may change over time. Always consult with a qualified legal professional or consumer rights advisor if you have specific questions or concerns about a car purchase or dealership practices. This blog does not establish an attorney-client relationship, and the information provided should not be taken as a substitute for personalized legal counsel.
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