The Attorney General’s Office has forced two Mount Kisco dealerships to return more than a million dollars to motorists who were overcharged on vehicle purchases and leases. Investigators determined that the dealers slipped a two-percent charge onto almost every transaction, presenting it as a legitimate sales commission even though the money never reached the salesperson and offered no benefit to the buyer.
How the illegal 2% fee worked
Both DARCARS Lexus and DARCARS BMW listed a line item that read sales commission on the purchase agreement. In reality, the fee was optional and not required by law, yet sales staff described it as a “standard dealer fee” or as direct compensation for the salesperson. The charge was pre-printed on contracts, and the dealerships advertised prices that excluded the fee, making the deals appear cheaper than competing lots.
From October 23, 2021, through May 30, 2022, the 2% surcharge generated roughly $5.8 million at the Lexus location and $2.9 million at the BMW location. By applying the fee to more than 96 % of sales and leases, the firms amassed millions of dollars in revenue while consumers believed they were paying fair market prices.
The unwanted “DARCARS Assurance” bundle
In addition to the phantom commission, the dealers slipped an add-on called DARCARS Assurance into contracts. The package promised a $2,500 collision credit and a stolen-vehicle credit, yet the payout was contingent on the buyer leasing or purchasing another vehicle from the same dealership within 60 days of an insurance settlement – effectively a loyalty coupon with no immediate value.
Neither dealership disclosed that the bundle was optional. Marketing materials portrayed it as a mandatory component of the purchase, and the fine print failed to explain the restrictive conditions. Customers who complained about the package received inconsistent explanations, and many were told it was required to “offset costs and commissions” for employees.
Settlement figures and what comes next
The agreement obligates DARCARS Lexus to reimburse $892,671.26 to all buyers who paid the sales-commission fee during the October 2021-May 2022 window. Both dealerships will together pay an additional $281,847.72 for other violations, including the deceptive Assurance add-on. Consumers who were charged after May 2022 can submit claims through a state-run process; officials expect those filings could push total refunds into the multi-million-dollar range.
Attorney General Letitia James emphasized that New Yorkers often save years to afford a vehicle, and they deserve transparent pricing free of junk fees. The settlement follows a series of recent enforcement actions targeting hidden fees in the auto sector, underscoring a broader push by New York regulators to protect buyers from abusive dealership practices.
