For example, it costs $400 a month to buy a vehicle, but the dealership tells the consumer it's $500, according to Daly. Such inflation might derive from either a fictional interest rate or the cost of products added to the deal but undisclosed to the customer, Daly said, estimating the two payment packing practices occurred with equal frequency.
"To me, dealerships inherently do it on a regular basis," Daly said.
Daly, a former dealership employee, recalled being instructed during his first sale to add products to a payment and not tell the customer. After asking if that was illegal, Daly was told, " 'We've never been caught.' "
When behavior resembling payment packing is brought to a dealership's attention, the retailer will argue it wasn't the intention, Daly said. But from the government's perspective, "where there's smoke, there's fire."
According to Daly, enforcement of payment packing by the Federal Trade Commission and state attorneys general fell off during the Trump administration. But the laws remain on the books, and KPA saw a rise in private litigation during that time — lawsuits that led the FTC or state attorneys general to take action.
"It didn't start at the state or federal level," he said.