If you’re thinking of buying a car soon, you may want to hold off until the Federal Trade Commission’s CARS Rule goes into effect. This rule prohibits dealers from using shady tactics like peppering you with hidden fees, overcharging for silly extras like nitrogen in your tires, and luring you in with fake online prices.
It was set to go into effect July 30th, 2024, but has been paused due to petitions from auto industry groups. Hopefully, the rule will be effective by the end of the year.
I think a lot of dealers will keep acting shady, even after the rules go into effect. I say that because I’ve been helping other people buy cars for 11 years, and in that time, I’ve seen car dealerships brazenly ignore consumer protection laws that are already in place.
I think the CARS Rule will help bring order to chaos eventually — but not overnight.
In the meantime, here are the most common dealer ripoffs to look out for, and how to respond. Not every dealer will try such shenanigans (many of them are perfectly reasonable and easy to deal with), but some will and it pays to be prepared!

Erika Taught Me
- To expose a dealer’s hidden fees, ask for the “out-the-door price” and a full, itemized invoice before you schedule a test drive.
- Even if a dealer says they never negotiate the out-the-door price, most will if you bring them a competing offer.
- If a dealer refuses to honor your warranty, involving the automaker can help move things along.
. . .
1. Adding Junk Fees to the Advertised Price
Ah, yes. The ol’ bait-and-switch scam. This form of fraud is so common among car dealerships that many states like Texas have laws specifically telling them — and only them — to knock it off. And yet, countless dealers nationwide keep doing it.
Here’s how the scam works:
First, you find a car you like online for a great price. Say, $25,000. You figure that with taxes and fees, it’ll end up costing around $27,000. So you test drive it, fall in love with it, and are ready to sign on the dotted line.
Except your estimated monthly payment is way higher than you thought it would be. You dig deeper and see the dealer is charging you $29,238 for the car — way higher than the $27,000 number you had in your head.
Turns out, the dealer added a “reconditioning fee” or “protection package” to the price at the last minute. You protest but they say, “We add that to every car we sell” or “It’s a great value because you’re getting our elite protection package with ceramic coat.” Blah, blah, blah.
Regardless of their justification, the bottom line is that they car-catfished you. They told you one thing online, and when you showed up, it was something else entirely.
So what can you do to protect yourself from such shadiness?
Well, you can always cite your state’s consumer protection laws and see if they buckle. Or do us all a favor and bring a class action lawsuit against them.
But there’s also a far, far easier way to detect a bait-and-switch before it becomes an issue.
How to respond
Before you book a test drive or even set foot in the dealership, call, email, or text them with a simple question: “Please send me the itemized invoice with the final, out-the-door price.”
This is dealer-speak for “Cut the shenanigans and send me the real price.” The out-the-door price (OTD) is an industry term meaning the exact dollars and cents that you’d have to pay for the car, and the invoice is simply the receipt showing every fee that factors into the OTD. Mentioning both terms shows that you’re an informed consumer!
Here’s a sample invoice from a deal I did in 2023. Note how the sale price was $35,709, but the OTD magically became nearly $4,000 higher due to fees for “optional accessories” and more.
Naturally, some dealers will resist your attempts to expose their hidden fees. When my friend, Katie, was trying to buy a Mazda CX-5, I emailed the dealer asking for the OTD and got this response:

This one gave me a chuckle. Why is it “hard” for your managers to put together a price without Katie on the premises? Did she borrow your only calculator?
Obviously what he’s really saying is, “We’d rather your friend comes to test drive by herself so she gets attached to the car and we can trick her into paying more.”
Here is all you have to say in response:

Sure enough, he sent the OTD price 10 minutes later.
@erikakullberg What car salesmen don’t want you to know about getting a better deal 🤯 #moneytok #personalfinance #car #lawyer #psychology ♬ original sound – Money Lawyer Erika
…
2. Overcharging for Silly Extras
Dealerships are like Disneyland — everything costs more just because you’re inside. Over the years I’ve had dealers try to sell me or my clients things like:
- Nitrogen in the tires for $90
- VIN etching for $300
- A tow hitch for $895
- Extended warranties for $1,800 per year of additional protection
- A ceramic coat (read: wipe-on paint armor) for $4,000
All of these things are cheaper outside the dealership. Nitrogen is free at Costco (and doesn’t really do anything) and VIN etching kits are $19.99 on Amazon. Extended warranties cost around $1,000 per year of added coverage, and you can buy a tow hitch directly from Toyota for $250.
As for ceramic coats, a good kit costs $100 on Amazon and takes two hours to apply.
When you look at the dealer markups on these accessories — some as high as 4,000% — they make a $23 sushi roll at Epcot seem like a bargain.
How to respond
“I’m open to letting F&I talk me into some optional extras, but for now, I’d like them taken off the invoice.”
F&I is the finance and insurance office. Once you’ve told your sales rep that you’re ready to buy, they’ll escort you to F&I where you’ll sign tons of forms, discuss financing, and get the actual keys. It’s also F&I’s job to upsell you on all this extra silliness, especially an overpriced extended warranty.
That’s why the phrasing above is so carefully worded. If you give a dealer hope they can rip you off later, they’ll be more likely to negotiate upfront.
3. Pretending They Don’t Negotiate
I’d say about 40% of the dealers I’ve worked with have told me some version of “We don’t negotiate.” It’s usually a party line like:
- “Our online price is already our best possible price.”
- “We can’t go any lower or we’ll lose money on the sale.”
- “The car is already priced competitively for the market.”
I can tell you that all of them eventually negotiated. The least amount I’ve been able to save was $375. The most was $10,500 (off an Audi SQ5 for my neighbor).
How to respond
Getting dealers to budge doesn’t require any scheming. Just bring them a better price from a competing dealership and ask them to beat it.
Negotiating with a car dealer should look something like this:
- You: “What’s your best OTD price on this 2019 Mazda3?”
- Dealer A: “$19,326.86 with taxes and fees.”
- You: “Can you get me out the door for $18,000?”
- Dealer A: “No, we don’t negotiate.”
… a few days later …
- You: “Dealer B offered me an OTD price of $18,500 for a similarly equipped 2019 Mazda3. Before I buy from them, can you make a better offer?”
- Dealer A: “Let me talk to my managers… They say the best they can do is $18,250 out-the-door, but you have to come in this week.”
- You: “Super! How’s Wednesday?”
See? Nothing fancy, just good old competitive pricing.
RELATED: How to Negotiate Medical Bills, Step-by-Step
4. Refusing to Fix (or Replace) Your New Car
Let’s say you ride off into the sunset in your new car, giddy over how much money you saved by negotiating.
But then your honeymoon period is rudely interrupted by a part failure. Maybe your engine is idling rough, your infotainment screen won’t work, or your car won’t even start in the first place.
Whatever the issue, you’re not happy, especially given how much money you just spent (or keep spending each month). So you take it back to the dealer and they quote you $3,186.23 to fix it.
If you feel like this should be the dealer’s problem and not yours, you’re right!
All new cars sold in the U.S. include a bumper-to-bumper warranty lasting for at least three years or 36,000 miles from the date your car first sold to its original owner (whichever comes first). These factory warranties guarantee the vast majority of the parts on your car against defects — meaning if your engine, transmission, or sunroof motor stops working for no discernable reason, the dealer is obliged to repair it free of charge.
But will they do it with a smile?
“Dealers will find any conceivable way to weasel out of warranty work,” says Sean Kim, an experienced automotive mechanic in Atlanta. A common tactic, he says, is to blame environmental factors, which aren’t covered under warranty.
“For example, they’ll say you’ve got a water leak to get out of doing a rust repair.”
Warranty disputes with dealers can be messy. That’s why it helps to be firmer this time.
How to respond
“Your warranty states that you'll replace any defective parts in the car. I’d rather not involve [name of your car’s manufacturer] and my attorney in this matter, but it’s a step I’m willing to take.”
Like any other business, dealers don’t like lawsuits. They also know that if you involve the automaker itself, it’ll often coerce the dealer into compliance so they might as well give in now.
Lastly, if they try to fix the same problem multiple times and it keeps persisting, you may be legally entitled to a total replacement. It’s called the Lemon Law.
The Bottom Line
To end on a positive note, the CARS Rule is a massive win for car buyers, though many dealerships didn’t need it in the first place. But there are also dealerships out there that will try one of these sneaky tactics when you're shopping for your next car!
But if you go in confident and prepared with these tips in your back pocket, you're more likely to walk away with the car you want at a price you can afford.

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Chris Butsch is an Atlanta-based author and TEDx speaker helping young people prosper mentally and financially. His work has been featured in Forbes, Fortune, USA Today, U.S. News & World Report, ConsumerAffairs, and more. He also delivers college keynotes through CAMPUSPEAK and trains incoming cohorts at the CDC.