Why Are Car Dealers Still Allowed to Lie About the Price?

Buying a new car in America is ridiculous. You look at cars online. One that looks good is priced at $39,995. You research it against other makes and models. You drive to the dealership. You meet with a salesperson for an hour. Maybe you throw in a trade to sweeten the deal. Only then do you learn something curious. That $39,995 car is really not $39,995 after all. Oh no. It has a $1,495 protection package. A $995 appearance package. Nitrogen-filled tires. VIN etching. Paint protection. Fabric protection. Dealer-installed security system. Dealer fee. Some weird thing you don’t need that they claim is “already installed,” so you can’t decline it. What started out as a $39,995 car is now $43,000 or $44,000.

Here’s something regulators should have figured out 30 years ago. Why is this allowed? If the dealer won’t sell it to you for the advertised price, it never was the price. Name it bait-and-switch if you want. Deceptive pricing. Call it what fancy lawyers want to call it. Consumers know it as one simple word:

Lying

The FTC Knows It’s Happening

This is not just one pissed-off customer’s story. In March 2026, the Federal Trade Commission issued warning letters to 97 auto dealership groups nationwide. Why? Apparently, those dealers were advertising prices that weren’t actually available to consumers.

The FTC told dealers to list upfront costs, including items the consumer must pay. The warning letter specifically names these unfair practices: advertising prices that exclude required fees, deceptive discount ads where consumers can’t qualify, baiting a price based on dealer financing, requiring add-on purchases not included in the advertised price and failing to have the advertised vehicle available. Reread that.

Those aren’t aggressive sales tactics. Those are tactics designed to make a car seem less expensive than it is. If the FTC had to issue letters to 97 groups of dealers at once, maybe it’s time we stopped acting like deceptive pricing is just a few bad apples.

How Bad Can It Get? Try $75 Million

Consider Lindsay Automotive Group. In April 2026, the FTC and Maryland Attorney General announced a settlement resolving allegations that Lindsay advertised falsely low vehicle prices and then charged buyers unwanted fees and add-ons that could push their actual costs thousands of dollars higher. Consumers charged more than $75 million between April 2020 and December 2025 may qualify for redress. Lindsay also agreed to pay Maryland a $3.1 million civil penalty.

And here’s the most revealing part: the proposed order requires the company to provide consumers with the total price of the vehicle, including all mandatory fees. Think about how ridiculous that is. We need government enforcement to make businesses tell customers what their product actually costs.

Then There Are the Add-On Games

Three dealerships owned by Asbury Automotive in Texas were accused by the FTC of charging consumers for add-ons they hadn’t agreed to purchase and telling them the add-ons were required when they weren’t.

Consumers told the FTC they were charged thousands of dollars for items such as chemical coatings, service contracts, and insurance. The FTC alleged that a survey at all three dealerships showed that as many as 75% of consumers were charged for add-ons they didn’t agree to or were told were required when they weren’t. You read that right. Seventy-five percent of consumers. If three grocery stores got caught putting items in customers’ carts and charging them at checkout, would we call that “upselling”? Of course not. But car retailing has its own language that makes abuses we’d consider egregious anywhere else sound almost commonplace.

We’ve Seen This Movie Before

In the Napleton Automotive case, the FTC and Illinois alleged that dealerships slipped unwanted add-ons such as payment insurance and paint protection into customers’ purchases. The government alleged that some consumers had specifically declined the products or had already confirmed prices that didn’t include them. Others were allegedly told the products were free or required.

Napleton agreed to pay $10 million to settle the case. The FTC subsequently returned more than $9.8 million to affected consumers. How many enforcement cases do we need before recognizing that the system itself creates opportunities for abuse?

This Isn’t an Argument Against Dealer Profit

OK, let’s kill the industry’s favorite straw man. Dealers deserve to make money. Sell all the extended warranties they want. Tire- and-wheel coverage. Service contracts. Paint protection. Accessories. GAP crap. Anything else that consumers voluntarily want to buy. And MSRP is the manufacturer’s suggested retail price. Just because a dealer sells a car above MSRP doesn’t mean they’re evil incarnate. But there is a gigantic difference between: Dealer: “Our price is $44,000.” Refund: “Our price is $39,995″…until I get there and find $4,000 worth of mandatory dealer-installed crap tacked on. If it’s mandatory, it’s part of the price. Include it in the price you advertise. If it’s optional, let me say no thanks.

Regulators Actually Had a Solution

The FTC’s CARS Rule leveled the playing field and ended bait-and-switches and undisclosed junk fees. The Federal Trade Commission estimated the rule would save American consumers $3.4 billion annually and another 72 million hours every year spent shopping for cars. Seventy-two million hours. Take a moment to let that sink in and think about what it says about how efficient the car-buying process is. A market should work to bring buyers and sellers together to agree on a price. Instead, we’ve built an obstacle course of stages designed to confuse and frustrate you. Stages that include advertised pricing versus negotiation vs. trade-in math vs. financing vs. monthly-payment tricks vs. add-ons vs. finance office intimidation. And you have to be your own consumer advocate during each one. Ask yourself why?

Make the Advertised Price the Price

Congress and state legislatures don’t need a 400-page fix. They need a brutally simple rule. The advertised price is the price. If a dealer posts a car at $39,995, that consumer should be able to buy that car for $39,995 plus legitimate taxes and government-imposed charges. Every required dealer fee should be included in that advertised price.

Every optional product should be labeled OPTIONAL. Every add-on requires the consumer’s explicit permission. No bait-and-switch rebate. No price that increases if you don’t accept dealer financing. No mandatory $1,500 protection plan sprung on you after you’ve been at the dealership for two hours. And please, enough with the warnings. If they require a refund. Fine them heavily. Raise fines for repeat offenders. Publicize their enforcement. Make lying cost more than telling the truth.

Automakers Should Stop Looking the Other Way

Wait, there’s one more culprit worth talking about: manufacturers. Automakers pour billions of dollars into building brands based on trust, quality and customer experience. Then turn around and sell those customers off to independently owned franchised dealerships for what is likely the largest purchase of their lives. If that experience concludes with the consumer feeling deceived and manipulated, who do manufacturers think they’re going to take revenge on? The dealership? Sure. But what brand do you recall seeing on the hood? Manufacturers need to force far tougher pricing transparency standards on their dealer networks where franchise law permits.

Consumers Don’t Hate Buying Cars. They Hate the Games.

That’s the difference the auto industry consistently fails to understand. Consumers love cars. They love researching cars, test-driving them, and driving something new home. What they don’t love is wondering if they’re getting screwed.

They hate negotiating for three hours. They hate finding out the online price was bogus. They hate being shuffled to a finance office to begin the sales process anew. And they really hate finding another $2,000 or $3,000 tacked onto a deal they thought they’d already negotiated. The FTC’s enforcement actions show that consumers’ concerns are well-founded.

So stop telling them they just need to negotiate better. Stop telling them they need to read 60 pages of documents more carefully. Stop running a game where only the dealer benefits from opacity—and blaming consumers when they miss things. Post the real price on the windshield AND on your website. Sell optional products to the customers who actually want them. Charge a fair profit. And hand over the keys. If you can’t do that at a car dealership in 2026, then the problem isn’t your customers. It’s you.