Passport Auto Group: The Mid-Atlantic Dealership Chain That Added Thousands in Unwanted Fees After Customers Agreed on a Price

Passport Auto Group Inc., a multi-franchise automotive dealership chain operating across Maryland, Virginia, and Washington D.C., agreed to pay $3.38 million in consumer redress to resolve findings that its finance and insurance offices routinely added optional add-on products — including paint and fabric protection packages, tire and wheel warranties, guaranteed asset protection insurance, and vehicle service contracts — to vehicle purchase agreements after customers had negotiated and agreed on a vehicle price, presenting these products as standard charges or as required conditions of financing rather than as optional extras that customers could decline.DOCUMENTED

The practice exploited the natural fatigue and reduced vigilance that consumers experience late in a car purchase transaction — when they have already spent hours negotiating price, have selected a vehicle they want, and are sitting in a finance office working through paperwork they want to complete as quickly as possible. Add-on products slipped into that late-stage paperwork, presented with language that implies they are standard or necessary, generate substantial additional revenue for dealerships while obscuring from the customer that they are paying for products they could have declined or purchased elsewhere at lower cost.REVIEWED

The Finance Office as Revenue Center

Automotive dealerships typically earn significant revenue from the finance and insurance office — sometimes more per vehicle than from the vehicle sale itself. F&I managers are compensated based on how many products they sell per vehicle and at what margin, creating strong personal financial incentives to maximize add-on attachment rates. Training materials used by F&I managers often focus on techniques for overcoming customer resistance to add-ons rather than on ensuring customers understand they are purchasing optional products that are fully removable from the transaction.REVIEWED

The Passport Auto findings describe specific practices that regulators found were designed to obscure the optional nature of the added products. Finance managers presented multiple add-on products together in a bundled monthly payment format — showing the customer that their payment would be a specific monthly amount without clearly breaking out which portion of that payment was attributable to which add-on product. Presenting add-ons as part of a blended monthly payment rather than as individual line-item costs makes it substantially harder for the customer to evaluate the cost of each product and to identify which ones they want to decline.DOCUMENTED

Language That Implied Mandatory Status

Regulators found specific documented instances in which Passport Auto finance employees used language that implied add-on products were required — telling customers that certain products "came with" the vehicle, that they were "included in the financing," or that they were "standard" for that vehicle model — when in fact each was an optional product the customer had the right to decline. A customer who is told a product "comes with" a vehicle reasonably understands that to mean it is included in the negotiated vehicle price, not that they are being charged an additional amount for a separately priced product.DOCUMENTED

The paperwork presented to customers in the finance office contained line items for each add-on product, but regulators found that the presentation of the paperwork — the speed at which pages were reviewed, the emphasis placed on total monthly payment rather than individual line items, and the use of language suggesting standard charges — reduced consumers' practical ability to identify each add-on and make an informed decision about whether to purchase it. When a customer can't identify which charges are add-ons, they can't decline the ones they don't want.DOCUMENTED

Customers who had spent hours negotiating the vehicle price down were then handed finance paperwork that added back thousands in optional products — presented in monthly payment format that buried the individual costs and discouraged line-item scrutiny.

Disparate Impact Findings

The enforcement action included a disparate impact finding — an analysis of Passport Auto's sales records that compared add-on attachment rates across racial and ethnic groups after controlling for credit score, vehicle type, and other legitimate pricing variables. The analysis found that Black and Hispanic buyers were charged for add-on products at rates materially higher than white buyers with comparable credit profiles and purchase characteristics, a disparity consistent with the discretion that finance managers exercised in how aggressively they presented and attached add-on products to different customer groups.DOCUMENTED

Disparate impact in auto dealer add-on practices has been a recurring focus of fair lending enforcement, reflecting the recognition that dealer discretion in the F&I office can produce racial disparities even when no explicit discriminatory intent is present — discretion in who gets offered add-ons, how they are presented, and whether customers' attempts to decline are accepted or overcome can vary systematically across demographic groups in ways that produce measurable outcome differences.REVIEWED

Consumer Rights at the Dealership

Consumers purchasing a vehicle have the right to decline any add-on product offered in the finance office, including paint protection, fabric protection, tire and wheel warranties, gap insurance, and extended service contracts. These products are optional regardless of how they are presented, and their inclusion or exclusion does not affect the consumer's ability to finance the vehicle at the negotiated price. Before signing any finance office paperwork, consumers should ask for a complete list of every charge on the contract beyond the negotiated vehicle price and financing terms, and should confirm that each add-on line item is optional and can be removed. Consumers who were charged for add-on products at Passport Auto and believe those products were not adequately disclosed as optional should contact the dealership's consumer redress administrator for information about the refund process.DOCUMENTED

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