Buying a used car is practically an American rite of passage-a process fraught with anxiety and exhilaration. You spend hours browsing online, analyzing different models and comparing prices until you finally see it-the one that feels right, listed for the price you can afford. Unfortunately for many, that feeling of triumph quickly fades the moment they enter a car dealership.

At that point, the advertised price suddenly feels less like a guarantee and more like a guideline as the customer navigates through a torturous negotiation over undisclosed fees and tacked-on costs. That isn’t the result of isolated incidences or the occasional unscrupulous dealer: it’s a systematic practice dubbed “bait-and-switch pricing,” and, new data show, it has evolved into an expensive nationwide phenomenon.

According to a detailed study of the problem by CoPilot, a car shopping app, fully 59% of all used car transactions end up with fees tacked on at the point of sale that consumers were not initially shown. All together, that practice cost Americans $11.8 billion annually in fees and deception. And all of that comes at a time when the Federal Trade Commission is in the midst of cracking down on the auto industry and warning them of exactly these kinds of illegal bait-and-switch schemes, after industry groups insisted it was merely an isolated issue.

1. Independent Data Exposes the True Scale of Hidden Fees

Digging deep into the research is a treasure trove of transaction-level data that gives the most transparent, and eye-opening, peek into the discrepancy between what dealers advertise a used car for and what a consumer actually shells out for it. The research done by CoPilot (which gets paid for absolutely no money by any dealership) analyzed almost 500 used cars transacted from December 2025 to April 2026.

The cold hard numbers revealed:

• Nearly 500 purchases analyzed independently
• 59% of buyers faced undisclosed fees
• 88% paid more than advertised price
• Average extra cost was $1,055
• CoPilot accepts zero dealer funding

That staggering headline figure that 59% of buyers incurred extra charges isn’t the whole story, however. When typical paperwork costs were included in the calculation, the rate of buyers shelling out more than advertised ballooned to 88% just about nine out of 10 consumers left the dealership with more of their wallet gone than the price they originally saw advertised.

2. The Financial Damage Goes Far Beyond a Thousand Dollars

For many car buyers, hidden dealer fees don’t only go over average price, but they can really put the sting in the budget to the test. In fact, the numbers showed that 1 in 4 used car shoppers paid more than $1,500 in dealer fees on top of the price they’d initially been quoted, and that a jaw-dropping 1 in 8 consumers were surprised to shell out more than $2,500 more than expected once their vehicle hunt was complete.

What it actually costs real buyers:

• Average add-on fees total $1,055
• One in four paid over $1,500
• One in eight paid over $2,500
• Carefully planned budgets destroyed
• Turns excitement into unexpected debt

These are not negligible rounding differences or obscure line-item charges. For many shoppers, and especially for anyone shopping on a tight budget for a used car, $2,500 more can be the difference between an affordable purchase and financial ruin. For all the deceptions plaguing consumer retail today, the one that looms largest is the space between the price that attracts a shopper on the Internet and the amount they finally pay in the finance office.

3. Hidden Fees Fall into Two Distinct and Deceptive Categories

To guard themselves, consumers need to learn the structure of those charges before they become a victim. Those illegal fees are generally of two kinds totally phony costs or services that are legitimate services that dealers inflate to sky-high prices. Either way the consumer’s wallet is targeted at the point where walking out is the hardest for the consumer to do.

Know your enemy before you sign:

• Two distinct fee categories exist
• Excessive fees inflate real charges
• Illegitimate fees are fully fabricated
• Both serve the same purpose
• Introduced when walking away hurts

For any buyer looking to enter a car dealership negotiating room, know what sets the two aside. Exaggerated fees are fees for actual services and are applied at amounts much more than what state statutes allow or average, although still legitimate fees. False fees are fees charged for a product and/or service that a consumer never signed for but was placed on the vehicle without their consent and later sprung on the customer when the buyer had emotionally already “closed the deal”.

4. Excessive Fees Inflate Standard Charges Far Above Legal Limits

Some “excessive” fees are fees for common services you expect when buying a car. But their costs have inflated way past state-regulated caps and averages to keep consumers safe, researchers discovered. For instance, the average vehicle purchase cost about $292.64 in license fees over what the state’s DMV actually charged, and registration costs over by an average of $258.55. However, the most common add-on, documentation fees, cost on average a whopping $520 just for a car deal’s basic paperwork.

Legal services billed illegally high:

• License fees exceeded limits $292.64
• Registration inflated by $258.55
• Documentation fees averaged $520
• Title fees ran $205.92 over
• Electronic filing marked up $220.57

Other fees you may encounter with this type of shady dealer tactics are: title fees $205.92 higher on average than the prevailing rates. Filing fee$220.57 over typical charges, and even transport fees $212.33 higher on average to move vehicle from a remote storage lot. The price of these legitimate charges, if it weren’t added after a contract has already been signed, shows the clearly shady behavior of a company, ready to victimize a naive consumer.

5. Illegitimate Add-Ons Can Quietly Add Thousands to Your Bill

A second class of bogus, hidden fees are altogether illegitimate add-ons the car buyer did not order nor did include on the advertised vehicle price tag. In many cases the unwanted gadgetry is loaded onto the vehicle and the charges are tucked away at the final hour of a sale where the consumer is committed to driving away with the vehicle.

Charges you never agreed to pay:

• VIN etching package costs $1,795
• Reconditioning fee adds $1,581.83
• Paint protection costs $1,366.17
• Anti-theft systems average $1,227.25
• Door edge protection costs $1,067.71

Each of these shady add-ons cost the consumer. The etch, wheel and lock cost alone, could run upwards to $1,795. In a reconditioning charge meant to look like a thorough inspection and detailing, the added on amount was an estimated $1,581.83, without your consent and was not made known to you the consumer until the final sticker price. By already implemented and in force regulations of the FTC, these charges should not have been made, or at least had you given full consent.

6. Domestic Brands Carry the Most Hidden Fee Risk

But this trend isn’t spread across different types of cars or brands. According to the CoPilot’s data, brands of the car make mattered domestic carmakers like Ford, GM and Chevrolet most often added hidden fees (71% of transactions were affected with an average of an additional $885.19), but foreign makes such as Honda, Toyota and Kia weren’t far behind (64% of transactions added fees with a cost of $851.97 on average).

Which brand carries the most risk:

• Domestic brands worst at 71%
• Foreign brands close behind at 64%
• Luxury brands most transparent overall
• Only 39% of luxury purchases affected
• Luxury average fees just $425.99

What’s even more interesting is that it looks like consumers buying luxury are less susceptible to the issue: For models made by Mercedes-Benz, Audi, and Lincoln, only 39 percent of those sales came with undisclosed fees, and the total average added-fees cost was much less, only $425.99.

7. COVID Profits Created a Habit Dealers Refuse to Break

The answer lies within the market conditions the last few years. It really was a “perfect storm” for the automotive industry caused by the pandemic. The combination of supply chain issues and a lack of computer chips left dealership lots empty at a time of massive increased demand for new vehicles. The average price of a new car now stands at $49,667 an increase of 29% since the pandemic started.

How a pandemic created bad habits:

• New car prices rose 29% overall
• Used car prices up 18% since 2020
• Dealers enjoyed record 2021 and 2022 profits
• Margins shrinking as market normalizes
• Bait-and-switch became profit replacement

These days, CoPilot Co-Founder Michaela Baker said, dealerships just can’t quite bring themselves to go back from those peak profits as the market steadies out, so bait-and-switch pricing is what they rely on to keep it all rolling. And Baker comes at the issue with a perspective that is incredibly unique. Having spent years creating the very technology that dealerships use to process deals, Baker is able to see first-hand just how, when, and why these fees tend to get sprinkled in with buyers mostly having no clue until the F&I office.

8. High Staff Turnover Spreads Deceptive Practices Everywhere

Exacerbating the issue is the astonishing fact that dealerships experience over 70 percent sales staff turnover annually nationwide. In effect, the problem has taken root within dealership ranks, as individuals learn and carry these dishonest practices to dealerships throughout the state from dealership lot to dealership lot. What would otherwise be individual bad apples morphs into an institutional challenge.

Why bad habits keep spreading everywhere:

• Annual staff turnover exceeds 70%
• Practices migrate between dealerships
• Not isolated bad apples anymore
• Systemic incentives drive behavior
• Business model rewards non-transparency

Baker’s verdict is brutal and empirical: the trade refers to the issue as a minor concern. “The numbers do not show that”, she says, pointing to the “system design that leverages the difference between advertised prices and actual transaction prices to its advantage.” As she points out, the whole model hinges on it, and ethical dealers can’t do much individually.

9. The FTC Has Acted but the Regulatory Safety Net Has Gaps

Unfortunately, consumers are left on their own on the street despite one of the biggest warnings to the auto industry from the FTC in years (in March 2026), the regulatory response was, to say the least, somewhat confusing and the most serious warning against the industry: deceptive price gouging and ripping consumers off is against the law and warning letters went out to 97 dealerships nationally but this crackdown follows the FTC CARS Rule which was tossed out in 2024 removing most federal protections against this very practice.

Regulators acting but gaps remain:

• FTC warned 97 dealership groups
• Deceptive pricing declared explicitly illegal
• CARS Rule overturned in 2024
• Strongest protection now gone
• Burden now falls on buyers

Prior to the CARS Rule, car retailers were required to provide pricing for vehicles and had specifically prohibit added fees and price Gouges for all sales. Since there is now less regulatory assurance available, car buyers can be on their own to catch the gimmicks and stand against deceptive selling practices before sitting in the dealer finance office.

10. Buyers Who Prepare Themselves Hold the Most Power

Unfortunately, lacking federal guidelines, car buyers have to play devil’s advocate every time they enter a negotiation at a car dealership. But with careful attention and a few key steps, all car shoppers can avoid becoming victims of bait-and-switch sales before it costs thousands of dollars.

Arm yourself before you arrive:

• Demand out-the-door price writing
• Review every single line item
• Decline any unrequested add-ons
• Research your state’s standard fees
• Challenge anything that looks excessive

Being tough when asking for out-the-door prices in writing beforehand drastically cuts a dealer’s chances of playing bait and switch. Have average state fees on the brain; if you notice a dealer’s fees are unusually high, for title, license, or registration, call the sales manager out and haggle. By knowing average prices and challenging every fee, buyers can quickly close the gap.