CarGurus is facing a regulatory enforcement lawsuit in New York over allegations that its online vehicle listings misled consumers by labelling cars as “Good Deals” or “Great Deals” despite additional mandatory fees.
The New York City Department of Consumer and Worker Protection (DCWP) alleges the company deceived customers through misleading price ratings, hidden charges and an artificial intelligence-powered chatbot.
Officials said the investigation identified more than 2,000 alleged violations of New York City’s Consumer Protection Law.
According to the DCWP, some listings advertised vehicles below market value before additional fees, down payments and trade-in requirements were considered.
One example involved a 2018 Honda listed as $2,212 below market value and rated a “Great Deal”. However, mandatory fees meant its actual price was $1,473 above market value, the department said.
The lawsuit, filed in New York State Supreme Court, seeks to prevent CarGurus from engaging in allegedly deceptive practices and impose civil penalties.
The DCWP also reported that an analysis of more than 40,000 online listings found mandatory fees increased advertised vehicle prices by an average of approximately $1,100.
CarGurus CEO Jason Trevisan rejected the allegations, saying the claims did not reflect the facts and overlooked the company’s long-standing commitment to price transparency. He said the company would defend itself vigorously.
CarGurus has introduced measures requiring dealers to disclose mandatory fees on used-car listings to retain their Deal Ratings.
Listings without disclosed fee information receive a “No Rating” and are ranked lower in search results. The platform has also introduced badges and filters to help shoppers identify listings with clearer pricing.
The legal action comes shortly after CarGurus expanded its dealer technology offering with VINMax, an AI-powered marketing tool that uses marketplace data to identify vehicles that could benefit from additional promotion.
CarGurus said VINMax-boosted vehicles sold nine days faster than comparable listings, while generating 34% more daily leads.
The case highlights growing regulatory scrutiny of online vehicle pricing and the transparency of digital car-shopping platforms.
