New York Dealer To Refund Over $1 Million To Buyers Over Shady Selling Tactics

• DARCARS applied a 2% sales commission fee to new cars.
• The dealership must refund customers from 2021 and 2022.
• Car buyers received conflicting statements when they asked about the fee.

Two car dealerships in Westchester County, New York, have been ordered to pay more than $1 million in refunds to customers, following an investigation by the Office of the Attorney General (OAG).

An investigation into DARCARS of Railroad Venue (DARCARS Lexus) and MT Kisco Automotive, LLC (DARCARS BMW) was initiated in February 2022 when the OAG received a complaint that the dealer had added a “sales commission charge” of more than $700 to the purchase of a new vehicle, without informing the buyer. It was soon discovered that these sales commission fees had been collected since October 2021.

Read: The FTC Warned 97 Dealers, Now Autotrader And Cars.com Are Changing Their Price Displays

Ordinarily, sales commission fees are paid directly to the salesperson, but that wasn’t the case here. Instead, the fees never went to the employee responsible for the sale. In addition, the OAG found that DARCARS failed to disclose that the fee was completely voluntary and was not required to buy or lease any of the dealer’s vehicles.

MT Kisco Automotive, LLC

The investigation also revealed that when consumers asked the dealership group about the charge, “they were met with inconsistent, vague, conflicting or misleading explanations.” In some cases, they were told the charge was a “standard dealer fee” required to “offset costs and commissions” paid to employees, or to compensate the salesperson. The sales commission fee was set at 2 percent of the vehicle’s price, allowing DARCARS to generate millions in extra revenue.

New York Attorney General Letitia James has ordered DARCARS Lexus to pay $892,671.26 to reimburse all customers who were charged this commission fee between October 23, 2021, and May 30, 2022. In addition, customers who informed OAG about the dodgy sales tactics will share in $164,998.72 worth of refunds.

The dealer has also been instructed to pay $116,849 back to customers who paid for ‘DARCARS Assurance,’ which bundled together several products and services, including a collision credit and a stolen vehicle credit.