Car Dealership Problems - False Online Price Advertising - Whitney, LLP
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By: Daniel W. Whitney, Jr., Esq.
Whitney, LLP
409 Washington Ave, Ste 750
Towson, MD 21204
410 583 8000 - Phone
[email protected]
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Hi, this is Dan Whitney with the Whitney Law Firm in Towson, Maryland. Today, we're going to talk about the issue of car dealerships using false low online prices in order to lure customers into the dealership. And of course, once the customer arrives at the dealership, they've taken the time to drive there, look at the car and now they're ready to buy. All of a sudden that low price is not the price. The price can get increased by thousands of dollars. This is a standard typical scheme that car dealers, especially here in Maryland, are very familiar with. Scheme may be too generous of a word. I would be able to call this a business practice with certainty for many of them, both new and used car dealers. And they do it all the time.
And here's what it looks like. On one of the car websites, cars.com, cargurus.com, autotrader.com, whichever, the car dealers put a nice low price on there designed to get a buyer's attention, so when the buyer searches for the car in their area, that dealer's car pops up at the top of the list for being the least expensive. So of course, the customer gets excited and thinks they have found a deal and goes to the dealership. Once they arrive and they like the car and they kind of go down the path of getting ready to buy it, fees start to get added. Fees such as a reconditioning fee, which could be $500. It could be several thousand. Perhaps an inspection fee, maybe another thousand or 2,000. And there can be other fees.
Now, what happens is, most states, including Maryland have a limit to the fees that can be added onto the advertised price. So for example, here in Maryland, say we've got an advertised price of $20,000. The only fees that can be included as set forth in the advertisement are title and registration, tax, a dealer processing fee, which has to use the required legal disclosure language, which is set forth in law. And many of them don't use that. And if it's a new car, a freight charge. That's it. So what that means is, when a customer goes into buy a car in Maryland and they're told, "Oh, well, the car is 20,000, but there's a reconditioning fee of 2,000. And there's an inspection fee of 1,000." Those are illegal charges. Those fees are not legal. Dealers are not allowed to charge them, but they do it anyway.
Why? Because they get away with it most of the time. Now, what customers need to realize is even if they were tricked into paying that price, they've still got several legal claims and an attorney ... Or if they file a complaint with the MDA, they should be able to get that money back. We've had several cases like that, where a customer goes in, there's an advertisement and they qualify based on the terms of the advertisement. Usually it's just saying, "This is the price that's available to the general public." And they want to buy it. And they're told some story, either there's fees. Or another one that I hear a lot is, "Oh, you've got to be a member of the military or first responders." Well, that's simply not the case, unless there's a rebate or incentive in which that actually is a criteria.
But if that's not a criteria, obviously a dealer cannot use that to lie to a customer and get them to pay more money. But this happens all the time. We've sued new car dealers over this. We've sued used car dealers over this. And as long as you're able to produce the advertisement or use a website, there's a couple of websites where you can type the VIN in and find the old ... It's kind of like they take a snapshot of all the different car website advertisements and save them. There's some websites for that. The one that I use is vehiclehistory.com. That can be very helpful to show that at a certain point in time, before the customer bought the car, this was the advertised price. But the dealer, their price is up here and they obviously didn't honor that price.
So, if this has happened to you, you should know, it's not like you signed the contract and then you're out of luck. To the contrary, they deceived you and they got you to sign this probably based on false pretenses, or perhaps they fraudulently induced you by telling you, "You don't qualify," when really you did qualify. And you have the right to bring a lawsuit and seek to get compensation for what you were cheated, and perhaps more on top of that. So if this has happened to you, especially if it's here in Maryland, please feel free to give us a call.

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