Warning over hidden fees forcing drivers to spend $5,000 over asking price for new cars – how to spot them

HIDDEN fees are a nuisance for all buyers, especially those looking for a good deal on a new or used car.

Bret Bonnet was one of those buyers who thought he had found a bargain on a $70,000 car that was listed on an online vehicle deals site for just $63,000.

Drip pricing costs consumers thousands in additional hidden costs across multiple industries


Drip pricing costs consumers thousands in additional hidden costs across multiple industriesPhoto credit: Getty

What he learned about the price while talking to the supplying dealer caused him to abandon the entire business altogether.

“They said, ‘All of our cars have a $5,000 ‘market adjustment fee,'” Bonnet explained.

He said he could understand higher prices, but it was unfair that the dealer was shady in presenting the total cost of the car.

“You can put the actual price online – you don’t have to artificially lower the price and then say, ‘By the way, there’s a $5,000 fee,'” he began.

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“Now that they’ve wasted my time and had the audacity to bait and switch, I would never give them my business,” he said firmly.

According to CBS News, who spoke with Bonnet, these hidden fees don’t just apply to the automotive industry, including hotels and ticket agencies.

The hidden fees may have fancy names, but they are ultimately another way for the intermediary company to make more money or cover increased operating costs by charging consumers.

This practice is called “drip pricing” and essentially consists of a service provider or store dividing the price of a product into several line items at different stages of the purchasing process.

Sara Fisher Ellison, an economics professor at the Massachusetts Institute of Technology, said the practice is normal in sales, just adapted to the Internet.

“Before the Internet, you had to train a sales force to try to convince people to buy a more expensive mattress than they wanted… With the Internet, you just have to design your website to do that,” she said.

Typically the practice occurs through online transactions, but it has also found its way into businesses such as restaurants.

In Washington DC, many restaurants have begun charging additional fees as new laws require companies to pay their tipped employees a higher wage.

Syed Ejaz, financial policy analyst at Consumer Reports, says complaints about fees could weaken their dominance in the industry.

“Whether it is filing a complaint through any available portal or speaking to the person you are purchasing from, it is always worth raising your voice,” Ejaz said.

Ticket providers have recently come under fire for “junk fees” charged to customers at check-out; Consumers were so receptive that the Biden administration passed a law to reduce these fees.

Max Sarinsky, senior attorney at New York University’s Institute for Policy Integrity, says resolving the issue will take a long time.

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“Drip pricing is really not good for anyone. “They create a race to the bottom where all ticket sellers feel they have to advertise deceptively low fees or lose out to those who do,” he said.

Further: “It is not a problem that can solve itself because it requires good behavior from everyone involved.”


TaraSubramaniam is a Dailynationtoday U.S. News Reporter based in London. His focus is on U.S. politics and the environment. He has covered climate change extensively, as well as healthcare and crime. TaraSubramaniam joined Dailynationtoday in 2023 from the Daily Express and previously worked for Chemist and Druggist and the Jewish Chronicle. He is a graduate of Cambridge University. Languages: English. You can get in touch with me by emailing: tarasubramaniam@dailynationtoday.com.

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