Critical Shifts:
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Prevalent Bait-and-Switch Pricing: A substantial 59% of recent used car purchases included hidden fees added on top of the advertised online price. That number skyrockets to 88% when standard paperwork/documentation fees are included.
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Significant Extra Costs: On average, undisclosed add-on fees cost consumers $1,055 per transaction. The financial impact varies, with 1 in 4 buyers paying over $1,500, and 1 in 8 hitting more than $2,500 in extra costs.
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Regulatory Friction: The FTC flagged these specific pricing practices as illegal in March 2026, issuing warning letters to 97 dealership groups.
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Systemic Industry Drivers: According to CoPilot Co-Founder Michaela Baker, dealers are using these hidden fees as a mechanism to maintain pandemic-level record profits as the market normalizes. The problem is further amplified by a high 70% annual sales staff turnover, which spreads these deceptive practices across different lots.
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Independent Data: The findings are based on nearly 500 actual user transactions completed between December 2025 and April 2026. Because CoPilot accepts no funding from dealerships, the data offers an independent, transparent look at dealer pricing behavior.
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New transaction-level data from AI car shopping app CoPilot, showed 59% of recent used car purchases included fees added on top of the advertised price – the specific practice the FTC flagged as illegal in March when it sent letters to 97 dealership groups threatening enforcement action. CoPilot’s 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:
- 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.
