When buying a new or used car or truck, you should read the contract carefully, or you could end up paying more than you expect.

Earlier this week, the New York State Attorney General's office said that consumers that shopped at a Nissan dealership from May 2010 to September 2013 were charged as much as $5,000 for service contracts without their authorization. The Attorney General also accused the dealership of crediting customers with less than the agreed amount for vehicles that they traded in, and charging more than the negotiated vehicle price.

The car dealership was sold in 2013, but the settlement with the previous owners, announced earlier this week, requires them to pay nearly $102,000 in restitution to 119 consumers. That number could rise. In settling the case, the former owners did not acknowledge wrongdoing.

Such practices have been taking place for some time. In 2014, for instance, the New Jersey Division of Consumer Affairs obtained a $1.8 million settlement from eight dealerships that were accused of charging customers for unauthorized add-ons, among other wrongdoings.

Dealer bait and switch is “everywhere and very common,” says Daniel Blinn, managing partner of the Rocky Hill, Conn.-based Consumer Law Group. He estimates that he sees at least one consumer every week complaining about the problem.

If you sign a contract without looking, it will be your word against the dealer’s if you later find that you’ve been hoodwinked, says Blinn.  

Among the tricks that an unscrupulous car dealership may use, he says, is so-called packing, in which a dealer adds items that the customer didn’t authorize, often hoping that they’ll go unnoticed.

Such items may include a service contract or credit or gap insurance, which is an optional insurance coverage for newer cars that can be added to your collision insurance policy. There could also be charges for things you didn't request, such as undercoating and paint sealant. If the customer objects, a dealer may say that the government or the bank that’s financing the deal requires the add-on.

“A very common car dealership tactic is to slip in very expensive extras without bringing it to the customer’s attention,” says Blinn. One dealer, he says, included more than a $1,000 in oil changes in its contracts. In other cases, the dealer simply enters a higher vehicle price than the negotiated amount.  

What to Do

  • Ask about all charges. When negotiating the purchase of a new or used vehicle, discuss all fees the car dealership will add to the contract. Remember that many fees and other charges are negotiable.
  • Write down the terms. Whether you’re discussing fees, the cost of the vehicle, the interest rate on a car loan or any other expense, write down the amount. You can easily forget if you don’t. Do the same for the amount you negotiate on a trade-in.
  • Check the contract carefully. Once you have the contract, look for any products, services or fees that may be listed, but that you didn’t agree to. Check the list of charges you created earlier against the amounts in the contract. If you’re trading in a car or truck, verify that you are being credited properly for the negotiated amount. Also, make sure you’re receiving the full benefit of any rebate.
  • Don’t rush. If you’re feeling rushed or find that it’s hard to concentrate at the car dealership, take a copy of the unsigned contract home, advises Blinn and the New York State attorney general. You shouldn’t be intimidated by a dealer’s insistence that a deal is good only that day or by a warning that you’ll likely lose the vehicle to another customer if you delay. 
  • Get a copy of the contract. After signing the contract, get a copy and make sure it matches what’s on the original.
  • If you find a discrepancy, complain. If a dealer attempts a bait and switch, or you’ve been victimized, complain to your state’s motor vehicle department or to your state consumer protection office. You also can complain to the Federal Trade Commission or, in cases involving vehicle loans and leases, the federal Consumer Financial Protection Bureau. If you’ve been defrauded, you might consider contacting a consumer attorney.