by BLACK ENTERPRISE Editors
July 27, 2025
This all-too-common automotive dealership expertise is the results of a technique known as bait-and-switch pricing — and sadly, it’s the truth for 71% of used automotive patrons within the U.S.
Few buyer experiences can evoke as a lot anxiousness, uncertainty, and frustration as strolling right into a automotive dealership. As a shopper, you might discover the proper automotive on-line at an marketed worth inside your funds, solely to drive to the dealership to be met with an arsenal of psychological and emotional manipulation ways — all with the specific function of driving up the ultimate buy worth with out your full information, understanding, or consent.
This all-too-common automotive dealership expertise is the results of a technique known as bait-and-switch pricing — and sadly, it’s the truth for 71% of used automotive patrons within the U.S. In whole, bait-and-switch pricing quantities to a $11.8 billion downside yearly within the U.S. That is the way it occurs: Sellers promote a lower cost to “bait” the patron to enter the dealership. As soon as they’re on the dealership, the worth is then “switched” to a better out-the-door buy worth, by a spread of manipulative ways.
It’s essential to be clear, nonetheless, about what and who’re inflicting the issue of bait-and-switch pricing. Whereas the stereotype of the shady used automotive salesman is well-known, the actual situation lies with the seller enterprise mannequin, somewhat than particular person rogue salespeople.
Throughout the COVID-19 pandemic, automotive shortages drove up costs and seller earnings considerably — and dealerships now have a big incentive to keep up these earnings. With used vehicles nonetheless briefly provide from the pandemic, and with the current onset of auto tariffs, sellers have the clear higher hand with shoppers who’ve extra restricted choices and who’re dashing to purchase earlier than costs improve much more. Because of this, CoPilot has discovered that bait-and-switch pricing has develop into an much more prevalent situation for automotive consumers in current months.
Over the previous yr, CoPilot has spoken with automotive consumers across the nation and analyzed used automotive transactions throughout the U.S. This knowledge, for the primary time ever, quantifies how a lot shoppers had been charged in hidden charges on their used automotive purchases and brings actionable insights and knowledge to this downside. And we’re solely simply getting began pulling again the curtain on the scope of the issue of bait-and-switch pricing, which sellers are the worst offenders, and the way a lot it’s costing shoppers. The final word aim? Finish bait-and-switch pricing, for as soon as and for all.
What Bait-and-Change Pricing Seems to be Like at The Seller
Bait-and-switch pricing is outlined as automotive sellers deploying one or a number of of the next ways.
- Illegitimate charges: Illegitimate charges are expenses that sellers add to the underside line worth designed to extend seller profitability on the automotive.
- Extreme charges: Extreme charges are commonplace charges for reputable providers or equipment. Nonetheless, they characterize an instance of bait-and-switch pricing as a result of the quantity that sellers are charging the client for them is extreme and above the standard common.
- Expenses for add-on tools and repair packages: These occur when sellers cost additional for extra tools or providers that weren’t requested by the client, nor included within the marketed worth of the automotive. Examples of add-on seller equipment embrace LoJack, VIN etching, window tint, and exterior/inside safety, whereas widespread add-on service packages embrace oil adjustments, tire, prolonged warranties, and automobile upkeep.
It is very important observe, nonetheless, that sellers do cost reputable charges — affordable expenses for extra tools or providers offered throughout the sale course of. Some analysis on widespread charges and their common value in your state ought to reveal whether or not a price in your out-the-door worth is reputable.
By The Numbers: Key Takeaways
Hidden charges, a part of a broader sample of bait-and-switch pricing, are outlined as extreme or illegitimate expenses which are added onto the ultimate buy worth of a used automotive, with out being clearly communicated to the client.
1. License Price: $292.64
- The quantity in license charges that sellers are allowed to cost is capped by the state and shouldn’t exceed a certain quantity. This quantity is the typical quantity by which license charges exceeded the state restrict within the used automotive purchases analyzed by CoPilot.
2. Plate Price: $275.99
- Equally, plate charges are regulated on a state-by-state foundation and can’t exceed a certain quantity.
3. Transportation price: $212.33
- Transportation charges consult with the price of transport the automotive from one other location, like one other dealership. These charges can typically be marked up or comprise illegitimate add-ons.
4. Title price: $205.92
- In some states, title charges — the price of transferring possession from the client to the vendor, together with processing paperwork — are capped at a certain quantity. Even within the absence of statewide regulation, these charges might be thought-about extreme if the seller expenses additional for processing paperwork past the title switch.
5. Doc price: $204.32
- In some states, doc charges are regulated and capped at a certain quantity. Some states, like Florida, that don’t have statewide regulation are inclined to see excessively excessive doc charges.
1. Title price: $205.92
2. Doc price: common $204.32
3. Registration: common $258.55
- This represents the typical quantity that seller registration charges exceeded the quantity charged by the state’s DMV.
4. License price: common $292.64
5. Digital submitting price: common $220.57
Illegitimate Charges Evaluation
The illegitimate charges under fall into a couple of classes. They will embrace expenses for added options that had been pre-installed on the automobile, however will not be included within the remaining buy worth to the patron. They will additionally consult with additional options that the seller added to the automotive throughout the buy course of, with out asking the patron.
The widespread thread right here is that whereas these charges describe precise add-ons or providers, what makes them illegitimate is that they had been added to the ultimate buy worth of the automotive with out the patron’s information or consent.
1. Etching, wheels and lock: $1,795.00
- This contains the VIN etching, the wheel locks, and restoration system to guard towards theft.
2. Reconditioning: $1,581.83
- On paper, this price covers the dealership’s prices to get the automobile able to promote (together with inspecting, restore, and element).
3. Exterior paint safety: $1,366.17
- This price refers to a model title for a sequence of merchandise designed to guard the outside and inside of the automobile towards environmental harm (exterior) and spills/stains (inside).
4. Anti-theft/lo-jack: $1,227.25
- This refers to a theft safety or deterrent system.
5. Door edge: $1,067.71
- This refers to a product designed to guard the sides of auto doorways from nicks, chips, and scratches that may happen from contact with different objects, like partitions and different vehicles, and even when opening the door too forcefully.
1. Exterior paint safety: $1,238.23
2. Reconditioning: $1,366.17
3. Seller equipment: $1,581.83
4. Guarantee: $1,593.97
- An add-on bundle for prolonged warranties, service plans, or different dealer-specific advantages—these providers are completely discretionary to the patron, and they need to be capable to push again on the price if they aren’t involved in these providers.
5. Anti-theft: $1,227.25
Model Sort Breakdown
Home Manufacturers, e.g., Ford, GM, Chevrolet
71% of purchases had hidden charges
- The overall quantity of hidden charges was $885.19
- Illegitimate charges, common quantity: $855.13
- Extreme charges, common quantity: $30.07
International Manufacturers, e.g., Honda, Toyota, Kia
64% of purchases had hidden charges
- The overall quantity of hidden charges was $851.97
- Illegitimate charges, common quantity: $729.41
- Extreme charges, common quantity: $134.92
Luxurious Manufacturers – i.e., Mercedes-Benz, Audi, Lincoln
39% of purchases had hidden charges
- The overall quantity of hidden charges was $425.99
- illegitimate charges – common quantity: $361.25
- extreme charges – common quantity: $64.74
The Why: Document Seller Earnings Result in Misleading Enterprise Practices
New automotive costs skyrocketed throughout the COVID-19 pandemic, attributable to a spread of things, together with provide chain constraints and the semiconductor scarcity inflicting new automotive stock to plummet. On the identical time, shopper demand for vehicles heightened. This created an ideal storm of supply-and-demand points within the automotive market, one that also impacts automotive consumers at this time after they step onto the seller lot.
The worth will increase within the new automotive market then trickled into the used automotive market, inflicting these costs to soar as nicely.
- At present, new automotive costs are actually $49,667, up 29% for the reason that begin of the pandemic.
- Used automotive costs are actually $26,715, up 18% since March 2020. This created an extremely worthwhile surroundings for automotive sellers throughout 2021 and 2022 specifically.
New automotive provide began to rebound in mid-2023, as automakers had been lastly in a position to produce extra vehicles. Nonetheless, automotive costs have but to return down considerably from their peaks. New automotive costs, as an example, fell by simply 1% in 2024. In the meantime, sellers, who turned accustomed to file earnings throughout the COVID years, are unwilling to offer these up.
At present, greater than ever, the seller enterprise mannequin is incentivized to have interaction in nontransparent and at instances misleading pricing practices, leading to a whole bunch and generally 1000’s of {dollars} additional added onto automotive purchases every year.
Empowering the Client and Ending Bait-and-Change Pricing
Sadly — with the overturn of the Federal Commerce Fee’s Combatting Auto Retail Scams Rule in 2024, which had mandated that sellers transparently talk automobile pricing and restricted add-ons and hidden charges — there isn’t any regulatory answer to this downside. With out sturdy shopper protections within the automotive shopping for course of, it’s now incumbent on automotive consumers to have the ability to determine hidden charges and push again on the seller after they attempt to add these onto a purchase order.
To that finish, there are a couple of steps that buyers can take to be ready after they encounter bait-and-switch pricing on the automotive dealership:
- Whereas it could look like an apparent step, contact the seller prematurely and get the out-the-door worth in writing. This holds them accountable to a quantity and diminishes the seller’s means to make use of bait-and-switch pricing.
- Establish any charges that look increased than common or appear pointless. Observe up with the seller if there are any charges you want extra clarification on and attempt to negotiate any charges down that you simply really feel uncomfortable about.
- Analysis common charges in your state. This may enable you simply determine if what the seller is charging you is in keeping with what different sellers are charging.
This story was produced by CoPilot and reviewed and distributed by Stacker.
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