The FTC Just Banned Hidden Auto Dealer Fees — 3 Rules To Protect Your Cash
Anyone shopping for a new or used car knows the unique frustration that comes with finding a vehicle you love. After all of your research, you discover the ride you want online, you head to the dealership to make the deal, and all of a sudden you find that the actual on-the-lot price of the vehicle is thousands of dollars higher than was originally listed, thanks to hidden charges like “dealer prep” and various other “lot fees.”
As a result, the Federal Trade Commission (FTC) has stepped in to help.
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What the FTC Has Done To Help Car Shoppers
In March, the FTC sent warning letters to 97 auto dealership groups across America. Those letters made clear to dealerships that a vehicle’s advertised price must include any and all mandatory fees a buyer would be required to pay. This means any dealers who advertise one price but then add mandatory fees later in the purchasing process could be in violation of federal law, per theFTC.
It’s important to note, though, that the FTC didn’t totally ban all additional charges — government fees like title/registration and taxes can still be left out of a vehicle’s advertised price. Additionally, optional fees like extended warranties can also be excluded. However, any other fee that is necessary to the purchase of a vehicle must not be included in the advertised price — or else.
With the FTC now having your back, here are a few rules to help protect your wallet at the dealership.
Document Advertised Prices With Screenshots Before Visiting a Dealer
The FTC’s new rules are heavily-dependent upon advertised pricing — meaning that taking screenshots of a car’s advertised price can save you thousands at the dealership. Having screenshots in your phone of a car’s advertised price (as well as any promotional language or fine print) can help you if the dealership begins adding extra fees in-person.
Immediately Ask for an Out-The-Door Price at the Dealership
Before agreeing to anything at the dealership, ask for the full “out-the-door” pricing of a car. That’s the final fee that includes the vehicle price, accessories charges, dealership fees, taxes and registration and financing charges. Doing so can help you expose any mandatory fees that were being hidden from you in conversation.
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Beware a Dealer’s Financing Requirements
Another thing the FTC warned dealerships about? Advertising prices that are only available if you, the buyer, agrees to use dealership-arranged financing.
There are some dealers who will advertise low prices and discounts that are conditional upon using their in-house financing plans — meaning the vehicle’s price goes up if you attempt to utilize preapproved financing from your bank. Always call ahead to the dealership to find out if financing conditions impact a car’s pricing.
The Bottom Line
Know this: The FTC’s warning letters won’t kill off high dealership prices immediately, but new regulations are beginning to force dealerships to disclose those fees upfront rather than springing them on you right before you sign on the dotted line. Buying a car in 2026 is already difficult enough thanks to high prices; the FTC forcing this price transparency just made it a little easier for new vehicle shoppers.
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This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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