New York’s Attorney General secured $1.17M+ in refunds from DARCARS-owned BMW and Lexus dealers in Mt. Kisco after finding a hidden 2% "sales commission" omitted from online prices and a misrepresented "DARCARS Assurance" add‑on. The settlement requires restitution, a permanent withdrawal of the Assurance product, annual fair business-practices training, clear disclosure of fees, and a $700,000 penalty. Claim forms will be mailed to additional affected buyers, and total refunds could rise further.
NY AG Forces DARCARS BMW & Lexus Dealers To Refund $1.17M+ Over Hidden 'Junk' Fees
BMW/Lexus
New York Attorney General Letitia James has secured more than $1.17 million in refunds and ordered reforms after finding that two DARCARS-owned dealerships in Mt. Kisco — a BMW franchise and a Lexus franchise — charged deceptive “junk” fees that were omitted from online pricing and misrepresented to buyers.
What the Attorney General Found
Investigators determined the dealerships added a 2% charge to vehicle purchases labeled as a "sales commission." That fee was not shown in online listings, making advertised prices appear lower until customers reached the paperwork stage. Although the charge was optional, staff often obscured that fact and gave inconsistent explanations — calling it a standard dealer fee, a salesperson payment, or an employee commission — descriptions the A.G. concluded were false or misleading.
The DARCARS Assurance Bundle
The dealers also marketed a bundled add-on called "DARCARS Assurance," which promised benefits such as a $2,500 contribution toward an insurance deductible if a purchased vehicle was totaled. Customers were led to believe the package was mandatory. Even worse, to receive the deductible payout purchasers were required to buy or lease another vehicle from the same dealer within 60 days of their insurance settlement, effectively forcing repeat business to access advertised benefits.
Lexus
Restitution, Penalties, and Required Changes
As part of the settlement, the Attorney General’s office secured specific refunds and ordered significant business changes:
- $891,671.26 — restitution to customers charged the "sales commission" by the DARCARS Lexus dealership for purchases between October 21, 2021, and May 30, 2022.
- $116,849 — refunds to customers who were misled into buying the DARCARS Assurance and filed complaints with the Attorney General’s office.
- $164,998.72 — refunds to other consumers who complained about the deceptive sales commission.
- $700,000 — civil penalties assessed against DARCARS.
Additional affected buyers will be mailed claim forms; the A.G. says total restitution could climb into the millions. DARCARS has also been ordered to:
- Stop the deceptive pricing practices and clearly disclose all fees and add-ons in advertising and sales documents.
- Permanently withdraw the DARCARS Assurance product and any substantially similar bundle.
- Provide annual fair business practices training to all employees involved in sales, marketing, or advertising.
Why This Matters
The action follows broader federal scrutiny of dealer "junk fees" and underscores growing enforcement aimed at protecting car buyers from hidden charges. The penalties and restitution are intended both to compensate harmed consumers and to deter dealers from using deceptive pricing tactics.
Customers who believe they were charged similar undisclosed fees should check for mailed claim forms from the Attorney General’s office or contact the NY AG’s consumer protection division for guidance.
Help us improve.
