New York Recovers $1M from Dealership Misleading Fees: A state settlement orders refunds, ends disputed fees and adds new protections for buyers and lessees.

Car dealership refunds totaling more than $1 million are headed to New Yorkers after the state Attorney General’s Office found that two Westchester dealerships used misleading sales fees and costly add-on packages. The agreement offers direct relief to thousands of consumers and a practical warning for anyone shopping for a vehicle in Utica or elsewhere in New York: the advertised price may not tell the whole story.

New York Recovers $1M from Dealership Misleading Fees – Car dealership refunds totaling more than $1 million are headed to New Yorkers after the state Attorney General’s Office found that two Westchester dealerships used misleading sales fees and costly add-on packages. The agreement offers direct relief to thousands of consumers and a practical warning for anyone shopping for a vehicle in Utica or elsewhere in New York: the advertised price may not tell the whole story.

Car dealership refunds explained

Attorney General Letitia James announced the settlement on Sept. 16. Her office said DARCARS Lexus and DARCARS BMW, both in Mount Kisco, charged consumers a 2 percent fee that was described as a sales commission. Investigators concluded that the money was not paid directly to the salesperson, the charge was optional and customers received no benefit from it.

The dealerships also sold a package called DARCARS Assurance. According to the state, employees presented the package as if it were required even though it was optional. The package included collision and stolen-vehicle credits with restrictions that could sharply limit their value.

“New Yorkers save up for years to buy a car, and they deserve fair prices without junk fees that drive up the cost with useless add-ons,” James said in the announcement.

How much money will consumers receive?

DARCARS Lexus will pay $892,671.26 to reimburse consumers charged the disputed commission between Oct. 23, 2021, and May 30, 2022. The two dealerships will pay another $281,847.72 in identified reimbursements. That includes $116,849 for customers who complained about DARCARS Assurance and $164,998.72 for other consumers who contacted the state about commission fees.

Those figures add up to more than $1.17 million. Additional customers charged after May 2022 may qualify through a claims process. The Attorney General’s Office said that process could eventually produce millions of dollars in additional refunds.

DARCARS must also pay $700,000 in penalties. The company has stopped charging the commission, must clearly disclose future fees and add-ons, and cannot sell DARCARS Assurance or a similar bundled product at any New York dealership. Employees involved in sales, finance, marketing and advertising must receive annual fair-practices training.

What New York car buyers should check

The case involved dealerships outside the Mohawk Valley, but the consumer lesson applies statewide. Before signing a purchase or lease agreement, buyers should:

• Ask for the full out-the-door price in writing.
• Compare that price with the advertised offer.
• Question every fee and ask whether it is required by law.
• Decline optional products that do not meet their needs.
• Review financing terms separately from the vehicle price.
• Keep advertisements, emails and signed documents.

A fee printed on a standard form is not automatically mandatory. Buyers should ask who receives the money and what service it purchases. If an employee says a charge is required, consumers can ask for that claim in writing.

Why the case matters in Upstate New York

Cars are essential for many residents of Oneida and Herkimer counties, where public transportation does not reach every workplace, medical office or rural community. A fee equal to 2 percent of a $35,000 vehicle is $700. For a household already managing insurance, fuel and loan payments, that extra cost can upset a monthly budget.

The settlement also shows how one complaint can lead to a broader investigation. The Attorney General’s Office said it opened the case in February 2022 after a consumer reported an undisclosed charge of more than $700.

How consumers can seek help

People who believe they were affected should watch for a claims form and keep their contact information current. Other New Yorkers who believe a dealership used deceptive pricing can file a complaint through the New York Attorney General’s consumer complaint system.

The dealerships have entered a settlement and agreed to the required payments and changes. The state’s findings explain the conduct that led to the agreement. Consumers should still read any claim notice carefully and meet its deadlines.

A stronger path to a fair purchase

This case provides a clear rule for buyers: slow the transaction down. Ask questions, separate optional products from required charges and leave if the final price changes without a convincing explanation. Upstate New Yorkers depend heavily on reliable transportation, and they deserve a sales process that is just as reliable.

Anyone who sees a suspicious charge should save the paperwork and report it. Individual complaints can recover money for one family and expose practices affecting thousands more.

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