Price gouging is more than irritating, it is illegal

On Behalf of | Oct 21, 2021 | Auto Dealer Fraud

It’s a hard time to buy a vehicle. Due to supply shortages, there are fewer new and used cars at today’s dealerships, and that means prices have skyrocketed.

As Business Insider notes, a lack of computer chips, rampant supply chain problems and high demand have all caused auto prices to shoot up to new record highs. In fact, many buyers have started to find that dealers don’t even abide by their sticker prices. They are increasingly asking buyers to pay more than the listed price, which is known as price gouging.

What the law says about unfair sales practices

Depending on the circumstances, auto dealers may not just be upsetting their customers by raising their prices; they may actually be breaking the law. Connecticut spells out the rules for fair sales and business practices in Title 42. According to the law:

“Whenever any commodity or service is sold, or is offered, exposed or advertised for sale […] the price shall not be misrepresented, nor shall the price be represented in any manner calculated or tending to mislead or deceive an actual or prospective purchaser.”

Notably, this doesn’t mean that dealers cannot sell above the manufacturer’s suggested retail price (MSRP). However, it does mean that if a dealer has advertised a car at a certain price, they are not allowed to raise the price to the buyer.

Finally, the rules for private sales don’t have the same restrictions as those for dealer sales. If you work with a private seller, you don’t have the same protections.

What can you do about price gouging?

The first and best thing you can do to protect yourself from price gouging is simply to wait to buy your next vehicle. Of course, this is a great strategy when it’s an option, but it’s not always an option.

If you need to get a car now, you want to do your homework. Business Insider suggests you can avoid the worst price gouging by thinking about what you really need and being flexible. You can also take a couple more steps to better protect yourself:

  1. Go to the dealer’s website to find the price at which they’re advertising the vehicle.
  2. Check the advertisement for any hidden terms and conditions.
  3. Take a screenshot.

If the dealer wants you to pay more than the advertised price, you should go elsewhere. You’re not working with an honest dealer. This may be the case even if the dealer says the extra money goes toward required upgrades that you didn’t see listed in any of the dealer’s terms and conditions.

What can you do if you have already bought the car?

Misrepresenting the sales price is a crime in Connecticut, and dealers who mislead their buyers could face class C misdemeanor charges. Those charges won’t put money back in your pocket, but the courts don’t look too kindly upon auto dealer fraud. With the right help, you might recoup some of your losses.