Signing for a new BMW or Lexus, believing you’ve locked in the price, only to discover at the last minute a line item amounting to 2% of the vehicle’s price. That’s what happened to hundreds of customers in Westchester County, New York. Two dealerships belonging to the DARCARS group were cited for hidden fees added to new-car sales.
Following an investigation, the New York State Office of the Attorney General (OAG) is ordering more than $1.17 million in refunds. That’s about €1.08 million. In addition, $700,000 in penalties—roughly €645,000—are being imposed for what authorities describe as deceptive pricing practices. Since October 2021, DARCARS Lexus (DARCARS of Railroad Avenue) and DARCARS BMW (MT Kisco Automotive, LLC), located in Mount Kisco, billed a 2% “sales commission” on the price of new vehicles. The inquiry also uncovered an optional package branded as DARCARS Assurance, charged separately, that bundled several services such as a collision or theft credit. It was Letitia James, the state attorney general, who ordered these dealerships to reimburse affected customers, with a fund that could reach several million dollars for claims. And beyond this very local case, a broader message emerges for all car shoppers, well beyond New York.
How DARCARS Lexus and DARCARS BMW padded the bill
The OAG opened its investigation in February 2022, after a buyer noticed a “sales commission charge” of more than $700—about €645—appearing on the order form without any explanation. Investigations showed that this 2% commission had been added since October 2021 on new cars sold by the Mount Kisco dealerships. In a classic scheme, a sales commission is paid directly to the salesperson who closes the deal; here, the money stayed within the DARCARS group. The OAG also found that the commission was actually optional, and no customer was ever required to pay it in order to buy or lease a vehicle. When asked about the presence of this line, customers “faced inconsistent, vague, contradictory, or deceptive explanations,” the Office of the Attorney General notes, as cited by Carscoops.
Some customers were told, for example, that it was a “standard dealer fee.” The extra charge was described as intended to “offset costs and commissions” paid to employees or to compensate the salesperson. Beyond this commission, the agreement also references the DARCARS Assurance package. This bundle consisted of several products and services billed in addition. It included, for instance, a collision credit, theft coverage, or other protections. The package could reach $2,495, roughly €2,300. Authorities say the bundle was optional, but it was sometimes portrayed as essential. In both cases, a simple percentage or flat fee added at the end of the process produced substantial revenue for the DARCARS group. For the buyer, these lines came with no clearly explained benefit.
Refunds, penalties, and tips for buyers
Under the agreement with the State of New York, DARCARS Lexus must reimburse $892,671.26. That’s a little over €820,000. That amount will go to all customers who paid the 2% commission during the period in question. It covers sales concluded between October 23, 2021, and May 30, 2022. These refunds will be issued automatically for the period involved. An amount of $164,998.72, about €150,000, is set aside for customers who reported these practices. It will be distributed to those who contacted the OAG. The authorities also ordered the payment of $116,849, around €107,000, to buyers who paid for the DARCARS Assurance package. In total, the agreement already accounts for more than $1.17 million in refunds. A fund of at least $3 million, nearly €2.76 million, has also been established to compensate other affected customers through March 2025.
Alongside these refunds, the DARCARS group must pay $700,000 in penalties to the State of New York. The agreement also bars offering the DARCARS Assurance package—or a similar product—in its New York dealerships. The distributor also agrees to clearly display all fees and add-on products, specifying in plain terms that they are optional, and to train annually its sales, finance, and marketing teams in best practices for selling. This case sits within a broader push against “junk fees,” those charges added late in the process that inflate a consumer’s bill, at a time when the Federal Trade Commission has recently warned dozens of dealerships about their pricing-display methods. For a shopper, whether in the United States or in France, a few simple habits can help minimize the risk of unpleasant surprises when signing a deal:
- Ask what each fee line on the vehicle’s price represents, and reject any that are not desired;
- Verify that all optional packs or services are clearly labeled as optional, with their prices itemized;
- Compare the final amount on the order with the price advertised online or in ads;
- Take time to read the contract before signing, and delay delivery if any point remains unclear.
