Writer: Lucy Lazarony
Editor: Adam West
Reviewer: Ashley Fricker
Key Takeaways
- A proposed settlement would provide $4 million for consumer redress and require clearer vehicle pricing.
- One buyer allegedly faced a $5,295.65 inspection fee on a certified pre-owned car advertised for $15,700.
- Consumers allegedly encountered unwanted add-ons and inflated charges presented as government fees.
A Connecticut Nissan dealership accused of piling thousands of dollars in hidden and unauthorized fees onto vehicle purchases could pay $4 million to settle the case.
The Federal Trade Commission and the state of Connecticut announced the proposed settlement with the Manchester, Conn., dealership and other defendants over allegations that the dealership double-charged consumers for “certified pre-owned” vehicles and assessed other unauthorized fees.
“Manchester City Nissan systematically ripped-off Connecticut customers through needless, unauthorized junk fees,” said Connecticut Attorney General William Tong. “We sued in coordination with the Federal Trade Commission, and today’s settlement will now send millions of dollars back to customers.”
“Manchester City Nissan systematically ripped-off Connecticut customers through needless, unauthorized junk fees.” — Connecticut Attorney General William Tong
In January 2024, the FTC and the state of Connecticut sued Chase Nissan LLC, doing business as Manchester City Nissan, over alleged unlawful conduct at the dealership. The agencies alleged that the dealership’s own data showed that customers were frequently charged thousands of dollars in unlawful fees.
Some consumers allegedly had to pay to “certify” used cars the dealership had already advertised as “certified pre-owned.” Other add-on charges, including total loss protection, were allegedly inserted into financing agreements without consumers’ knowledge or consent.
What the $4 Million Settlement Would Require
Under the proposed settlement, the defendants would pay $4 million to be used for consumer redress. They would also be prohibited from making misrepresentations about whether vehicles are certified or include a limited manufacturer warranty.
The defendants would have to clearly disclose the maximum total price of each vehicle, excluding required government charges, and obtain consumers’ express, informed consent for all charges.
The stipulated order will have the force of law if it is approved and signed by the federal judge overseeing the case.
Buyers Allegedly Paid Twice to Certify Used Cars
The alleged charges included thousands of dollars in inspection fees on vehicles advertised as certified pre-owned.
A “certified pre-owned” car is a used vehicle that has been inspected and repaired to the manufacturer’s specifications. It also carries an extended warranty from the carmaker.
Nissan’s rules prohibit dealers from charging a certification fee beyond the price of the car. But Manchester City Nissan allegedly did just that.
In one instance, a consumer visited the dealership to buy a certified pre-owned car advertised for $15,700. The dealer allegedly added a $5,295.65 “inspection fee” even though the car had already been inspected.
Unauthorized Add-ons Allegedly Increased Size of Auto Loans
The dealership also allegedly charged consumers for add-ons they did not agree to purchase, including guaranteed asset protection, service contracts, maintenance contracts, and total loss protection. Total loss protection appeared in 90% of all Manchester City Nissan sales, according to the FTC’s complaint.
In another instance, a consumer negotiated a price of $20,500 for a Nissan Rogue Sport. But when she went to sign the sales contracts, her promised monthly payment had increased, which she attributed to a credit issue.
Instead, she discovered that Manchester City Nissan had allegedly added more than $7,000 in add-ons to the amount she financed.
The agencies also alleged that the dealership deceived consumers about government taxes and fees by claiming certain dealership charges were required by the government.
One consumer was allegedly told that Connecticut registration and other state fees came to $345. The actual total was $208.20.
FTC Sends Letters to 97 Auto Groups
Manchester City Nissan is far from the only dealership whose advertised prices have drawn the FTC’s attention.
In March, the agency warned 97 auto groups nationwide that the price in an advertisement must include every mandatory fee a buyer will have to pay.
The letters urged auto dealers to review their advertising and pricing practices. The FTC said the warnings are part of its effort to ensure consumers can buy vehicles at the advertised price without undisclosed mandatory charges.
