Black Customers Paid $190 More in Interest for the Exact Same Car, Regulators Found

Ed Napleton Automotive Group, a large auto dealer chain operating locations across Illinois, Florida, Pennsylvania, and Missouri, buried hundreds or thousands of dollars in junk fees for unwanted add-on products inside the financing paperwork customers signed after long negotiation sessions. According to the Federal Trade Commission and the State of Illinois, the dealer group also discriminated against Black customers, charging them measurably more for financing than similarly qualified non-Latino white customers purchasing comparable vehicles.DOCUMENTED

Napleton agreed in March 2022 to pay $10 million to settle the joint lawsuit, a record-setting monetary judgment for an FTC auto lending case at the time, with the agency later distributing more than $9.8 million in refunds to affected consumers.DOCUMENTED

What the complaint alleges

According to the complaint, Napleton's dealerships often added hundreds or thousands of dollars in illegal fees for products like extended warranties and service plans into the financing paperwork customers signed, typically after long, exhausting negotiation sessions, embedding the charges into the amount financed and spread across monthly payments so they were difficult for a buyer to spot.DOCUMENTED In some instances, the complaint alleges dealership staff falsely told customers the add-on products were required to purchase or finance the vehicle at all, rather than optional extras a buyer could decline.DOCUMENTED

How the discrimination was documented

Beyond the junk fee allegations, the complaint alleges Napleton employees had wide latitude to increase a customer's total loan cost either by marking up the interest rate above what the lender offered or by adding on extra products to the final contract — discretion the complaint alleges was applied unevenly along racial lines.DOCUMENTED Black customers were charged approximately $190 more in interest and $99 more for similar add-ons than similarly situated non-Latino white customers, according to the FTC, figures based on comparing customers matched for comparable vehicles and credit circumstances rather than a raw, unadjusted average across all transactions.DOCUMENTED One consumer cited in the complaint was charged nearly $4,000 in add-on fees at an Arlington Heights, Illinois dealership, on top of a comparable amount already paid as a down payment.DOCUMENTED

Why unsupervised employee discretion enables this pattern

Samuel Levine, then Director of the FTC's Bureau of Consumer Protection, said the agencies were “holing these dealerships accountable for discriminating against minority consumers and sneaking junk fees onto people's bills,” adding that dealerships “can expect to hear from us” as families face rising car prices.DOCUMENTED The underlying structural issue — individual employees given broad, largely unsupervised discretion to adjust financing markups and add-on charges deal by deal — is what regulators have identified as the common thread allowing both generalized overcharging and racially disparate pricing to occur simultaneously within the same dealership network.

Terms of the settlement

Under the settlement, Napleton agreed to pay $10 million, a record-setting figure for an FTC auto lending case at the time, with the funds directed toward consumer redress.DOCUMENTED The settlement also requires the dealer group to charge consumers only with express, informed consent, to stop misrepresenting whether any given fee is optional, and to implement a fair lending program limiting the discretion individual employees have to apply inconsistent financing markups.DOCUMENTED The FTC's subsequent distribution of more than $9.8 million in refunds, averaging $147 across more than 66,000 checks, reflects the broad reach of the underlying practices across Napleton's customer base.DOCUMENTED

One consumer at an Illinois dealership was charged nearly $4,000 in add-on fees — on top of a comparable amount he had already paid as a down payment.

Why the case matters

For car buyers of any background, the Napleton case demonstrates how embedding fees within financing paperwork, rather than disclosing them as separate line-item decisions, can obscure real cost differences long enough to cause lasting harm — and for buyers specifically concerned about discriminatory financing markups, it shows that statistical, matched comparisons of what different customers actually paid for comparable vehicles under comparable credit circumstances is the evidentiary tool regulators use to identify and prove exactly this kind of disparity.

Why matched comparisons are central to proving dealer discrimination

Regulators proving financing discrimination generally rely on matched-pair analysis, comparing what customers with essentially identical credit scores, loan terms, and vehicle prices actually paid, rather than a simple average across all transactions that would not control for legitimate differences in creditworthiness between individual buyers. That methodology is what allowed the FTC to isolate a $190 average interest disparity specifically tied to race, rather than to any of the legitimate factors that ordinarily explain financing cost differences between individual buyers.

What buyers can request to check for this kind of disparity

Buyers can request their specific interest rate markup above the lender's actual offered rate in writing, a figure dealerships are required to disclose upon request, and can compare that markup against published average rates for their credit tier through independent online calculators before signing any financing agreement. That comparison takes only a few minutes and can reveal a disparity no salesperson is likely to volunteer on their own. Dealerships that resist providing it in writing are, at minimum, worth treating with additional caution. A dealership confident in its pricing has no real reason to withhold that information from a paying customer. Buyers who insist on seeing that number in writing put themselves in a stronger position at every dealership, not just ones under a prior settlement.

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