At the South Carolina Department of Consumer Affairs, communications director Bailey Parker says a certain complaint is spinning like a broken record. It goes like this.
“Hey, I didn’t buy the vehicle, but just decided to contact you to let you know the price was totally different when I went to see a car advertised online. When I showed up, people who actually got to the closing process were about to sign all the paperwork and all of a sudden the price was $8,000 more than they expected,” Parker said.
Parker said South Carolina has fair advertising laws that dealers must follow. Dealerships, for example, must disclose what they include in bundled closing costs. And they must register with the state if they want to charge more than the costs charged by the state Department of Motor Vehicles.
“So we sent out this sort of consumer alert and memo to all of the auto dealerships in South Carolina, notifying them of these top three issues that we were seeing,” she explained.
Parker said some dealerships inflate the cost of official fees. “The DMV fee for a similar title and tax is a flat fee. But what some dealers were doing was actually inflating that and not disclosing that they had added an extra $15, $20, $25 dollars .”
Parker said some dealerships also add additional fees to advertised prices. “Consumers told us that they would see a price online, or that it would be displayed on television, in newspapers or elsewhere. And they were going to see the vehicle. And when they got there, it was thousands of dollars, thousands of dollars, more than advertised. It’s a big deal because specific laws say you can’t do that. You must put the real price of the vehicle in all advertisements, and it cannot be otherwise.”
Some dealers have manipulated the manufacturer’s suggested retail price or MSRP to make used cars look like bargains.
“MSRP is the Manufacturer’s Suggested Retail Price – what it is when new. You can’t apply that value to a used vehicle. That’s not how it works. But some dealers were saying, ‘oh, well, it’s worth it, but we’re only selling it for $16,000 versus $25,000, insinuating there was some discount or offer the consumer was getting when buying it.
Parker said complaints about car dealerships were growing across the country, fueled in part by chip shortages that have reduced inventories of salable cars.
“People need vehicles. So everyone was buying the used vehicles, and that, we think, fostered the idea of, ‘oh, well, that’s high demand so we can charge higher prices now, and we’ll put them in the closing costs, or we’ll put them in the DMV fees, whatever it is,” she added.
With rare cars, it’s a seller’s market. If you can’t wait to buy, shop prepared. The South Carolina Department of Consumer Affairs has several useful tools:
- An updated Car Dealer’s Guide is available for download
- Consumers can search and compare dealer closing costs
- To file a complaint, visit the South Carolina Department of Consumer Affairs and click “How do I…” and choose “File a Complaint?” from the drop-down menu