The Car Price Scam: Dealers Under Fire Over Hidden Fees
By Lauren Fix, The Car Coach®
That bargain price on a new car may be nothing more than bait. You see the ad, compare the numbers, and make the trip to the dealership. Then come the mandatory packages, dealer fees, and discounts you may never qualify for. Suddenly, the price that got you through the door is nowhere near the price you’re expected to pay. Now, the Federal Trade Commission is going after dealerships accused of these practices, and the numbers are hard to ignore.
Thousands More Than Advertised
On October 8, 2026, the FTC announced a proposed settlement with Greenway Auto Group. The agency alleges customers paid an average of more than $3,350 above the advertised price in over 92% of the transactions it reviewed. The complaint cites administrative fees, dealer fees, delivery charges, processing fees, and packages, along with discounts that allegedly were unavailable to some buyers. These remain allegations, not a final court finding.
The FTC also alleges Greenway used mailers suggesting consumers had won cash prizes that could be collected at a dealership, when the prizes were not represented accurately. The agency says it warned the company about its pricing practices in March 2026.
Think about what that means for a buyer. The advertised price gets the customer interested, but the actual charges may not become clear until the buyer has invested time, traveled to the dealership, and started negotiating.
Greenway isn’t the only dealership group facing allegations. The FTC and Maryland authorities pursued Lindsay Automotive Group over alleged deceptive pricing and unwanted add-ons. The FTC alleged that 88% of customers in a sample of transactions paid more than the advertised price. The complaints also described alleged pressure involving dealer financing and products buyers were told they had to purchase.
These cases are not proof that every dealership operates this way. They do, however, raise a serious question: how can consumers compare prices fairly when the advertised number may not reflect what they will actually pay?
The Federal Rule Is Gone, but the Fight Isn’t
The original federal Combating Auto Retail Scams Rule was vacated by a federal appeals court in January 2025 on procedural grounds and later withdrawn. That did not make deceptive advertising legal.
In March 2026, the FTC warned 97 dealership groups about potentially deceptive pricing, including mandatory fees excluded from advertised prices, conditional rebates, required add-ons, and vehicles that might not be available at the advertised price.
Then, in September, the agency published price-transparency guidance explaining its position that advertised vehicle prices should reflect the actual price consumers can pay, excluding only charges the government requires consumers to pay directly.
The guidance is not a new federal statute, but the FTC can still pursue deceptive conduct under existing consumer-protection law. Dealers can charge legitimate fees and sell optional products. The issue is whether the price is presented honestly and whether buyers understand what they are agreeing to purchase.
California Tightens the Rules
California’s Combating Auto Retail Scams Act, Senate Bill 766, took effect October 1, 2026. It establishes requirements involving vehicle advertising, price disclosures, add-on products, certain payment disclosures, and dealership record keeping. It also provides a cancellation right for qualifying used-vehicle purchases, subject to conditions and exceptions.
This does not mean every used-car buyer in California can return a vehicle for any reason. Nor does California’s law automatically apply in every state. State rules differ, and consumers need to understand the requirements that apply to their transactions.
But the larger point is clear: a price should tell buyers what a vehicle costs, not lure them in with a number that changes when the paperwork appears.
Misleading headline prices hurt more than consumers. A dealer advertising a complete price can look more expensive than a competitor leaving mandatory charges out of the headline. That rewards the lowest advertised number, not necessarily the best deal, and puts honest businesses at a disadvantage.
The same problem can arise when a buyer is steered toward monthly payments instead of the total cost. An extra product may sound inexpensive when presented as a small monthly increase, but the total can add up over a multi-year loan. Optional products are not automatically bad, but buyers should know their cost and whether they are truly optional.
Dealerships have every right to make a profit. Consumers have every right to know the price before committing their time and money. Regulators must enforce the law fairly, and dealers should be accountable for the claims they make in their advertising.
If the advertised price is merely bait, consumers aren’t shopping on a level playing field. They’re being asked to trust a number that may change when it matters most.