Washington State

Office of the Attorney General

Attorney General

Bob Ferguson

 In This Section

 High Pressure Sales
 Documentary Service Fees
 "Packing" Payments
 Changing the Contract Terms
 Warranty Service
 Cancellation Rights

A savvy consumer should be aware of some common misleading tactics used by car dealers.   We see the tactics mentioned below as serious violations of the Washington State Consumer Protection Act and want to know if you have been subjected to any of the following.  If you would like to file a complaint based on unfair or deceptive sales tactics, please file a complaint or download a paper complaint form here or call us at 1-800-551-4636.

Advertising Tactics

Advertising can be helpful to consumers by being informative and as a time-saving tool. Advertisements can also be confusing and some are even deceptive. 

 "Bait-and-switch" – a very attractive deal on a car is advertised (the "bait"), but at the dealership the salesperson tries to sell a more expensive car (the "switch").   State law requires that the dealer sell you the vehicle at the advertised price even if you are not personally aware of the advertised price.

"Special" or "Sale Price" – references a former price when the car may never have actually been offered at the "former" price 

"Above or Below Invoice" – "Invoice" price referred to in these offers may not really reflect what a dealer actually paid for the car.  The invoice price may incorrectly include an amount which the manufacturer holds back and later returns to the dealer as profit.  State law requires that advertised invoice prices be the actual cost of the vehicle to the dealer after all manufacturer holdbacks and incentives have been subtracted.

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High Pressure Sales Tactics

Holding keys – Salespeople will sometimes ask for the keys to your car "in order to evaluate it for trade-in purposes."  This is a reasonable request but you should insist that your keys be returned to you after the test drive.  It is an unfair sales practice for a salesperson to keep your keys while using high pressure sales tactics to get you to buy.

Quick Tips for Price Negotiation

  • Don't negotiate when you're tired.  Take a break.
  • If salesperson changes, always confirm where negotiations left off with the last salesperson.
  • Don't let emotions cloud your judgment.

Remember . . . there are lots of vehicles from which to choose!


Cash deposits – If a salesperson asks for a cash deposit to show "that you are serious about buying," you are under no obligation to provide such a deposit. You should be suspicious when asked to provide one. It is an unfair practice for a salesperson to take a cash deposit and then refuse to return it if you do not sign a contract.

Statements that do not bind you – If you are asked to sign a statement to the effect that you "agree to buy a car when terms can be agreed upon," the salesperson may try to insist that, because you signed such a statement, you are legally bound to buy a car. That is not true. You should not sign such a statement in the first place: even if you do, it does not legally require you to buy a car. When negotiations break down, you are free to walk away.

Multiple Salespeople / Multiple Worksheets – It is common for some salespeople to use forms called "worksheets" to negotiate terms with you.  Neither you nor the dealership are bound by what is written on a worksheet.  If you reach an agreement you must check it yourself to see that the terms on the worksheet appear accurately on the final contract terms.  If you do not understand something written on a worksheet or anything in the final contract, ask for an explanation and be willing to walk away if you don't get a satisfactory answer.

Blank Contracts – Sometimes a dealer will ask you to sign a blank document and tell you that the dealer will fill in the information later.  Don’t sign a document until it is completed fully to your satisfaction. 

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Documentary Service Fee

A dealer may charge an optional documentary service fee in an amount not to exceed $150.  This fee compensates a dealer for the cost of titling and licensing a vehicle.  It is an optional fee and a dealer may not represent that the fee is required by law.  A consumer is free to negotiate a waiver of the fee. Dealers must disclose this $150 optional fee in their advertisements when stating sales prices of cars.

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"Packing" or "Loading" Automobile Payments

Packing or loading payments is a slang term used to describe a practice promoted by the credit insurance business and used by the auto industry to get customers to agree to purchase additional products, such as credit insurance, service contracts, chemical protectants, and security devices, without revealing their true impact on their monthly payments.

Packing is played out when a customer finances their vehicle through the dealer.  It goes like this: a customer agrees to a purchase price and the dealer quotes a monthly payment approximately $20 to $40 higher than what is needed to cover the price of the vehicle.  That creates a "pack" or room in the payment to add in the optional products.  Dealership personnel are trained to suggest to customers during the negotiations that the optional products are included "free" or at reduced cost.

Because the monthly payment doesn't increase and because the customer believes the products are "free" or discounted, most people don't object when the products are included in the final contract.

Automobile dealers who use "packed" or "loaded" payment quotes try to conceal their actions, so you may not realize immediately that you are being misled.


  • Watch out if a dealer seems overly concerned with keeping your focus on the size of the payment, which doesn't seem to change during your negotiations
  • Listen for key words including "Protected payment" or "It's included!" or "It's provided no extra charge!" or "Your payment is insured, it won't change!"
  • Beware when additional products or services are added at "no extra cost"
  • Comparison shop for interest rates and financing terms
  • Check finance terms with your bank or credit union before signing up for dealer financing. Dealer financing may be more convenient, but interest rates may also be higher than those charged directly by banks
  • Consult an amortization schedule. Make sure payments quoted aren't higher than what is needed to cover the purchase price of the vehicle and products you have agreed to buy
  • Negotiate on price, trade-in value AND interest rate. Don't let the negotiations focus solely on the monthly payment
  • Request that all payment quotes be disclosed with interest rate and term (number of months) and the specific products and services that payment covers
  • Check purchase agreement and loan documents carefully to make sure only the products you have agreed to are included
  • Confirm the price of all products included in your sales contract and loan agreements
  • Ask what your monthly payment would be if optional products are removed from the contract
  • Remember everything is negotiable in a vehicle deal and nothing is "free"
  • There is no three day right to cancel a car purchase or lease. If you sign the contract, you are legally bound by its terms.

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Changing the Terms of the Contract

After a deal is agreed upon and the contract signed, if you are contacted by the dealer saying they now need a larger down payment, a higher monthly payments, or a co-signor you  are not required to accept these new terms.

By law, the dealer has 4 working days from the time of purchase/lease (excluding weekends and holidays) to find financing and finalize the sale according to the terms of the contract. When the dealer fails to locate the financing specified in the contract in that time period, there is no binding contract and the dealer must offer to return your contract documents, down payment and trade-in vehicle before attempting to negotiate a new agreement with you.

If you have taken possession of the car, you must promptly return it when notified that the transaction cannot be completed within the 4 working-days period.

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Warranty Service

If your new or used car is covered by a manufacturer's warranty and you have a problem which falls under the warranty, the authorized service department in the dealership is obligated to perform repairs required by the warranty.  A dealer may not refuse warranty service in order to avoid liability under Washington's "Lemon Law".

Motor Vehicle Lemon Law - If your vehicle is less than two-and-a-half years old and has been repaired under the manufacturer's warranty several times but still has a substantial problem or has been out of service for more than 30 days due to diagnosis and/or repair, the vehicle may be a "lemon." You may be eligible for arbitration under the state administered program which was created to decide warranty disputes between consumers and manufacturers. If the vehicle is determined to meet the elements of the Lemon Law, the manufacturer can be required to replace or repurchase the defective vehicle.

Service Contracts - When purchasing a service contract, check the dates that the warranty is effective to ensure that it does not cover the same period as the manufacturer’s warranty.  You can also cancel a service contract at any time during the life of the contract.  If you cancel within the first ten days after purchase and you do not make a claim, you must receive a full refund.  After 10 days but not more than thirty days, you must be refunded the full amount minus a cancellation fee up to $25.00 if no claim has been made.  After thirty days, the refund will be based on elapsed time or mileage from contract purchase minus a cancellation fee.

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No Three-Day Right of Cancellation

The most common myth of consumer law is that auto buyers have a three-day “cooling off” right to cancel a purchase.  There is no three-day right of cancellation when purchasing a vehicle at the dealer’s main place of business.

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