On March 13, 2026, the Federal Trade Commission (FTC) issued its most serious warning to the auto industry in years, specifying that deceptive dealership pricing practices are illegal. The agency followed this up by sending letters to 97 dealership groups threatening enforcement action. The auto industry’s response was to downplay the issue, with the National Automobile Dealers Association (NADA) issuing a statement that the “overwhelming majority” of dealers are compliant and framing the issue as a niche problem.
New transaction-level data from AI car shopping app CoPilot, released today, reveals a different story: 59% of recent used car purchases included fees added on top of the advertised price – the specific practice the FTC flagged as illegal. This finding is based on CoPilot’s analysis of nearly 500 used vehicle purchase transactions completed between December 2025 and April 2026.
This practice – known as “bait-and-switch pricing” – involves a dealer advertising one price online, but charging a higher one at the point of sale by adding fees that were never disclosed to the customer upfront. According to CoPilot’s data, these add-on fees averaged $1,055 per used car transaction.
“I spent years building the software dealers use to manage transactions,” said Michaela Baker, Co-Founder of CoPilot. “I know exactly what happens on the other side of the desk – how fees get structured, when they get introduced, and why buyers almost never see them coming until they’re already in the finance office. The industry calls this a fringe problem. Our data say otherwise.”
Key findings from CoPilot’s analysis include:
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When paperwork fees – commonly listed as “documentation” or “doc” fees – are included, 88% of buyers paid more than the advertised price, up from 59% when paperwork fees are excluded.
- These fees, which dealers charge for processing purchase paperwork that is necessary to complete a sale, were the most common fee type, costing consumers $520 on average.
- Extended warranties were the costliest single fee category added as part of the “out the door price,” averaging $1,480 per transaction. Dealers frequently presented these as purchase requirements, a practice the FTC has identified as potentially deceptive.
- While undisclosed add-ons averaged $1,055 per purchase, 1 in 4 buyers paid more than $1,500 in fees above the advertised price, while 1 in 8 faced more than $2,500 in extra costs.
“When the car market normalized after COVID and dealer margins started to shrink, they weren’t willing to give up the record profits they’d become accustomed to,” Baker said. “Bait-and-switch pricing became the mechanism to maintain them. And with over 70% annual sales staff turnover at dealerships, these practices get carried from lot to lot without anyone stopping to question them. This is a systemic problem that isn’t going to change without consistent transaction-level enforcement.”
CoPilot’s findings are based on actual transaction data from users of its platform – providing a ground-level view of the gap between what dealers advertise and what buyers actually pay. This is the specific practice at the center of the FTC’s enforcement focus. Unlike major competitors, CoPilot takes no money from dealers, giving it the independence to report transparently on dealer pricing behavior.
The full report is available at dealershiptricks.com/report
About CoPilot
CoPilot is an AI-powered car buying platform designed to be entirely on the consumer’s side. Unlike every major competitor in the car buying space, CoPilot takes no money from car dealerships — giving it the independence to tell consumers the truth about dealer pricing, which other platforms are structurally unable to do. CoPilot uses its insider knowledge of how dealerships manage transactions to help buyers identify hidden fees, verify advertised prices, and navigate the car buying process with confidence. Learn more about our efforts to end bait-and-switch pricing for good at dealershiptricks.com
View source version on businesswire.com: https://www.businesswire.com/news/home/20260615294553/en/
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