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Games Dealers Play: Selling New Cars For More Than MSRP

Thumbnail image for Car Salesman.jpgMany consumers contact us after they discover that they paid significantly more than the "sticker price", or the manufacturer's suggested retail price ("MSRP") for a new car.

Dealerships caught overcharging a consumer are  quick to point out that the MSRP is just the "suggested" price, and they argue that they are allowed to set higher prices for their vehicles at a higher price. Many dealerships claim that the price is determined by "supply and demand", and the consumer agreed to pay a higher price because the car is a popular model. This is true in rare instances. Sometimes there are waiting lists for popular new models, super premium cars, or limited edition vehicles desired by car enthusiasts, and some dealerships will demand a premium price.

But, most consumers purchase models that are readily available on the lot. Experienced car buyers know that most dealerships will cars in their inventory for less than MSRP, and savvy negotiators can sometimes save thousands of dollars. Yet, some dealerships will sell the same models to inexperienced consumers for thousands of dollars more than MSRP. In most instances, dealerships violate the law when they overcharge consumers for new cars.

Sometimes, a dealership will tell consumers that they have to pay a higher price because of their credit. But, it is a violation of credit disclosure laws to charge a higher cash price for a vehicle because of credit.

Other times, a dealership will tell a consumer that the higher price includes sales tax or some other additional charge. But, both federal and state laws require dealerships to  break those additional costs out for the consumer.

Our advice: Do your research before you go to a car dealership to buy a new car. There are many good tips in our on-line webinar on How to Buy a New Car, in which we tell consumers how to get a good price on a new car and tell them how to avoid being overcharged.

An attorney usually cannot help a consumer who didn't negotiate a great deal, but consumers who have been truly overcharged should consider having an attorney look at their documents.  Consumer Law Group does not charge for an initial assessment

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