One Kia dealer in Maryland has settled a lawsuit that involved allegations that it broke state law by charging customers additional fees on top of the advertised price. While the dealer doesn’t have to admit guilt, this settlement could put dealers engaging in similar practices on notice.
And dealers across the country are charging wild markups in addition to the MSRP. It’s such an issue that sites like markups.org have been created and Toyota dealers without any actually confirmed allocation of GR Corollas are trying to charge us $10,000 on top of the unannounced price.
The settlement requires Koons Kia to refund customer-disputed fees that could collectively total more than $1 million and pay up to $200,000 to the state for its investigative costs. They don’t have to pay that fee right away though according to Automotive News.
They actually have a year to comply with the ruling regarding customer-disputed fees and if they do so for an entire year the state will only require Koons Kia to pay $100,000.
At the heart of the lawsuit were allegations that Koons Kia was guilty of false advertising by adding fees and additional charges on top of the price shown on vehicles for sale.
Maryland Attorney General Brian Frosh laid down the general gist of the settlement saying “Car dealers must honor the price they advertise for their vehicles… I am glad that Maryland consumers will receive refunds for the fees that they paid above the advertised price.”
For its part, Koons Kia argued that it never broke any laws despite the fact that it displayed sticker price and not the actual sales price. Moving forward, the dealership has to adjust its practices.
Not only does new signage have to display the “full delivered cash price” but it must break down fees like processing charges, freight charges, and other miscellaneous charges. Why on Earth would any large dealership be willing to subject itself to more than $1 million in liability for something it felt it didn’t do?
“We agreed to the settlement to avoid the costs and disruption of litigation and because it requires us to make clearer in our advertising that the MSRP is not the sales price, which Koons KIA fully supports and in our opinion has no impact on our customer or the dealership,” said Koons Kia.
Call it strange to us but we’re not sure why that wasn’t the way they did business before the lawsuit.