Key Points

• NJ is scrutinizing auto dealer pricing, including drip pricing, loan packing, F&I add-ons, dark patterns, under existing Consumer Fraud Act authority
• CFA penalties of $10,000–$20,000 per violation applied per transaction create seven-figure exposure; AG subpoenas already issued to dealerships statewide
• Agency reports due September 14, 2026 expected to recommend new auto-specific regulations, including potential all-in pricing mandate modeled on California's CARS Act
• Dealers should immediately audit F&I products, advertising, consent processes, and digital retailing tools for compliance before enforcement action

In a pair of actions on June 15, 2026, New Jersey’s top officials launched an aggressive campaign to promote consumer-friendly pricing  — and auto dealers are clearly a priority target.

In Executive Order 19, New Jersey Gov. Mikie Sherrill directed every state agency to identify and crack down on so-called “junk fees” that burden consumers with hidden, surprise or excessive charges. On the same day, NJ Attorney General Jennifer Davenport published an Enforcement Statement making clear that many common fee practices already violate the New Jersey Consumer Fraud Act (CFA).

The AG’s statement specifically calls out auto industry practices by name. The EO mandates that all state agencies must report by Sept. 14, 2026, on junk fees in the industries they regulate and recommend new regulations — including potential “all-in pricing” requirements similar to California’s CARS Act.

With federal regulators at the Consumer Financial Protection Bureau and the Federal Trade Commission pulling back, New Jersey is stepping in at the state level. New industry-specific rules for auto dealers could follow.

Why Auto Dealers Are Specifically at Risk

The Enforcement Statement singles out the auto industry. It cites studies that show an average price markup of 170% on auto add-on products, including a dealership that charged $2,000 for a pen and keychain. It references “loan packing” — adding add-ons to a buyer’s monthly payment without disclosing their existence — and notes that auto lenders have charged fees for add-ons duplicative of the buyer’s existing insurance coverage.

The AG does not need new rules to act. The CFA already prohibits these practices. No intent to mislead is required — only the “capacity to mislead,” an objective standard.

Dealer practices identified as potentially unlawful include:

• Drip pricing/bait-and-switch: Advertising a vehicle price that excludes mandatory dealer fees added at signing.
• Excessively overpriced add-ons: Charging grossly inflated prices for products like paint protection, VIN etching, nitrogen tire fills, or “market adjustments” that provide little value.
• Loan packing and consent manipulation: Pre-loading finance and insurance (F&I) products onto contracts, pre-checking opt-in boxes, maintaining exclusive control of the mouse during e-signing, quickly scrolling through disclosures, or placing terms on a far-away screen.
• Dark patterns in digital retailing: Online car-buying tools that hide fees in dense fine print, use manipulated font sizing, or nudge buyers toward add-ons through deceptive design.
• Misrepresentation: Telling buyers a fee is “required” or “mandatory” when it is optional, or misrepresenting what an add-on product actually covers.
• Unbundling: Splitting the vehicle price into an array of separate fees (“documentation fee,” “reconditioning fee,” “dealer prep,” etc.) to obscure the true cost.

Penalties and Enforcement Precedent

The CFA carries penalties of up to $10,000 per violation (first offense) and $20,000 per subsequent offense. Because these are per-violation penalties applied across every affected transaction, a single improper add-on charged to hundreds of customers can produce seven-figure exposure.

The AG’s office is already active, as we have seen a myriad of subpoenas issued to dealerships both large and small across the state.

Immediate Action Items for Dealers

We are available to assist with compliance audits and to advise on restructuring fee and add-on practices to align with these new enforcement priorities. Do not wait until you get a notice from the AG or your local Division of Consumer Affairs.

1. Audit all F&I products.
   Review every add-on product for pricing reasonableness and genuine value to the buyer. Eliminate any product you cannot defend on a cost-benefit basis (e.g., $2,000 “appearance packages” consisting of a pen and keychain).
2. Review advertising for drip pricing.
   Confirm that advertised vehicle prices include all mandatory dealer fees. Do not exclude doc fees, reconditioning fees, or other charges that are later added at the deal desk.
3. Overhaul F&I consent processes.
   Ensure buyers affirmatively opt in to every add-on product. No pre-checked boxes. No pre-loaded products. Give customers control of the screen during e-signing. Allow adequate time to review all disclosures.
4. Train F&I staff immediately.
   Every F&I manager must understand that high-pressure tactics, rushing buyers through disclosures, and representing optional products as mandatory are now expressly in the AG’s enforcement crosshairs.
5. Examine digital retailing tools.
   If you use online vehicle sales or payment calculator tools, review them for dark patterns—are fees clearly disclosed upfront? Are add-ons presented neutrally or pushed through deceptive design?
6. Monitor new regulations.
   The September 14, 2026 agency deadline will likely produce recommended rules specific to auto sales. Watch for all-in pricing mandates similar to California’s CARS Act (projected to save car buyers $234 million/year).

The Bottom Line

The AG’s Enforcement Statement is not a future threat—it is a present reality. Enforcement can proceed today under existing law. As AG Davenport warned: “We are putting New Jersey businesses on notice that we won’t hesitate to act when we see [junk fees].”

Acting DCA Director Hollander specifically urged businesses to “review the Division’s Enforcement Statement … and correct any practices that violate the CFA before facing enforcement action.”

The time to act is now. The CFA is operative today, the AG is enforcing today, and your F&I practices are squarely in scope.

For more information, contact Seth L. Dobbs at sdobbs@foxrothschild.com, John Iorio at jiorio@foxrothschild.com or any member of Fox Rothschild’s Automotive Practice Group.

This information is intended to inform firm clients and friends about legal developments, including the decisions of courts and administrative bodies. Nothing in this alert should be construed as legal advice or a legal opinion. Readers should not act upon the information contained in this alert without seeking the advice of legal counsel. Views expressed are those of the author(s) and not necessarily this law firm or its clients. Prior results do not guarantee a similar outcome.