Auto Dealer Inflated Pricing

Car prices seem to be at their highest in recent years. Since vehicles are already so expensive, price inflation is more apparent. American car buyers may have no alternative but to pay car market prices until demand decreases. However, state and federal consumer protection laws still prohibit deceptive sales practices.

If a dealership makes you pay extra fees and costs without full disclosure, you can take legal action. Talk to a vehicle dealer fraud lawyer about your legal options.

What Is Inflated Pricing at a Dealership?

Inflated vehicle pricing generally refers to higher pricing based on market conditions. An inflated price for a new or used car means the price is higher than it would be under normal circumstances. Some buyers may have to pay inflated prices to buy a car.

Like other consumer goods, the selling price of a vehicle is based on supply and demand. Market conditions also affect the price of a car. Supply chain delays, shipping cost changes, and pandemics can cause the dealership to make market adjustments.

For example, the retail price of a new and in-demand vehicle can be higher than the carmaker’s MSRP. At the end of the year, additional rebates may lower the sticker price to move inventory off the dealer’s lot.

Inflated pricing generally isn’t against the law. Price increases are legal—as long as the dealership isn’t engaging in deceptive practices. Consumer protection laws may prohibit hidden junk fees not disclosed to car buyers.

Can Car Dealers Charge More Than MSRP?

Car dealerships can charge more than the manufacturer’s suggested retail price (MSRP), which is just the automaker’s recommended sales price. However, dealerships generally have room to charge less to incentivize drivers to buy a new car. Auto dealers can also charge higher prices for new vehicles in high demand.

Do You Have To Pay Additional Fees To Buy a Car?

You may have to pay some fees in addition to the sales price. The state or county can require additional costs and taxes. Ensure the dealership includes all the necessary fees so you know the vehicle’s actual price. Additional fees for a car purchase can include:

• Vehicle registration fee
• Sales tax
• Documentation fees

The dealership may also ask for other fees. You can often negotiate some of these fees with the salesperson. Some negotiable fees can include:

• Advertising fees
• Destination fees
• Dealer markups

Other prices are optional. Dealerships may try to increase the transaction price by recommending add-ons that may not provide much value. This includes extended warranties or service contracts. Make sure you understand the value of these additional costs so you can decline what you don’t need.

The dealership can require some additional fees as part of the sale. However, the vehicle ads should include these fees. If the ads don’t have all the required fees and costs, the dealership could be using false advertising. The Federal Trade Commission (FTC) and state consumer protection agencies can sue dealerships for deceptive business practices.

What Strategies Can I Use To Avoid Inflated Car Pricing?

Negotiating car prices can be tricky for most consumers. For consumers, car buying is a rare event. For the dealership, car sales negotiations are how they make their money. Make sure you understand the process before buying a car. Here are some tips for not paying more than you should for a vehicle:

• Read the fine print for any ads and make sure you know the included and additional costs
• Research from multiple sources the car you want to buy and its value
• Research your trade-in value with the Kelley Blue Book or other used vehicle price guide
• Secure a car loan through your bank or credit union before going to the dealership
• Get the out-the-door price in writing before you agree to the purchase
• Walk away if you think the dealership is trying to rip you off

Can an Auto Fraud Lawyer Help With Inflated Pricing Scams?

Buying a car when the market price is high may just be a cost of inflation. But if the dealership scammed you into paying more than you expected, it may be dealer fraud. Contact a dealer fraud lawyer to understand your legal options after buying a car with illegal fees.