NYC sues CarGurus, claiming its 'Great Deal' ratings hid dealer fees

Estimated reading time: 9 minutes.

Key facts

What happened: New York City's Department of Consumer and Worker Protection (DCWP) sued CarGurus, Inc. on October 5, 2026, and announced the case on October 15. The city says CarGurus labeled used cars as "Great Deals" or "Good Deals" when hidden fees and conditions made them more expensive than the market price.
The claims: The city says CarGurus broke the New York City Consumer Protection Law through its deal ratings, "below market" savings figures, fee disclosure badges and an AI chatbot.
Alleged violations: The complaint's three counts add up to at least 5,595 alleged violations. The city's press release describes "more than 2,000."
What the city wants: A court order stopping the practices, civil penalties of $3,500 per knowing violation, restitution to affected customers and the city's costs.
CarGurus's response: CEO Jason Trevisan said the company rejects the claims and "will defend the company vigorously."
Not a class action: Consumers cannot join or file a claim. Any restitution would depend on the outcome of the city's case.
The case: City of New York v. CarGurus, Inc., Index No. 454290/2026, Supreme Court of the State of New York, New York County.

What the city claims

The verified complaint was filed by the City of New York and DCWP Commissioner Samuel A.A. Levine, through Corporation Counsel Steven Banks. A verified complaint is one that a government lawyer has affirmed is true to the best of their knowledge. The defendant is CarGurus, Inc., a Delaware corporation based in Boston that runs the car shopping website cargurus.com.

The city says CarGurus presents itself as a neutral place to compare car prices. According to the complaint, the "Asking Price" shown on many listings left out "hundreds or thousands of dollars in additional fees, downpayments, and trade-in requirements." The city claims CarGurus then made things worse by attaching its own "Great Deal" and "Good Deal" labels and "below market" dollar figures to those prices.

"New Yorkers should be able to trust that a 'Great Deal' is actually a great deal," Commissioner Levine said in the city's announcement. "Our lawsuit seeks to stop bait-and-switch pricing, eliminate hidden fees, and ensure customers aren't getting fleeced when making one of the biggest purchases of their lives."

The complaint says the extra charges were often visible only at the bottom of a listing, in partially hidden text boxes that open fully only after a shopper clicks a button.

These are the city's allegations. No court has ruled on them.

How CarGurus deal ratings work

According to the complaint, CarGurus compares each listing's Asking Price with its own estimate of a fair retail price, called the Instant Market Value (IMV). CarGurus describes IMV as being based on "millions of data points including make, model, trim, year, mileage, options, and vehicle history."

Listings priced below IMV can be rated "Great Deal" or "Good Deal." Listings above IMV get "High" or "Overpriced." CarGurus also shows the dollar amount a car is "below market."

The city argues these labels are not vague praise. It says they are specific claims based on two numbers, the Asking Price and the IMV, so they become false when the Asking Price leaves out required costs.

The complaint also cites CarGurus's own dealer guidelines. Those guidelines say, "All prices…must be full cash prices available to any shopper. Prices cannot be conditional in any way; they must not require dealer-sponsored financing, a down payment, or other large or non-customary fees." The city claims CarGurus did not enforce that rule, which it says made the guidelines themselves misleading.

The listings cited in the complaint

The complaint gives several examples from New York City dealers. In each case, the city added the fees or conditions in the listing's fine print to the Asking Price and compared the result with CarGurus's IMV.

Listing (date cited)	CarGurus said	City's calculation after fees and conditions
2019 Audi Q5, Elite Mitsubishi (Jan. 6, 2026)	$14,999, "Great Deal," $2,818 below market	$3,685 in fees; $867 above market
2023 Chevrolet Malibu, Novo Motors (Feb. 18, 2026)	$13,990, "Great Deal," $2,603 below IMV	Price assumed a 20% down payment, plus a $1,995 pre-delivery charge; at least $19,482.50, or $2,889.50 above the $16,593 IMV
2018 Honda CR-V, Elite Mitsubishi (June 15, 2026)	$16,174, "Great Deal," $2,212 below market, "includes dealer fees"	Badge showed only a $175 documentation fee; fine print listed $3,685 more; $1,473 above market
2018 Mercedes-Benz GLE 350, Novo Motors (Sept. 22, 2026)	$18,590, "Great Deal," $3,413 below market	Price reflected the balance after a 20% down payment; $1,234.50 above market

The complaint says the fees on the Elite Mitsubishi listings were "Prep & Destination," a "Conveyance Fee" and an "Admin Fee." It says DCWP denied Elite Mitsubishi's most recent license application in part over misleading advertising.

The city says it found current misleading listings from at least two dealers, Northstar Mitsubishi and Novo Motors LLC, and at least ten New York City dealers over the past three years. Those dealers are not defendants in this case.

Ask for the out-the-door price in writing Before you visit or put down a deposit, ask the dealer for the total price including every dealer fee, and whether the price requires financing, a down payment or a trade-in. New York City rules say a licensed used car dealer's advertised price must include all charges connected with the sale.

Fee badges and the AI chatbot

According to the complaint, CarGurus added new "badges" to listings around April 30, 2026. They tell shoppers when the "price includes fees," when there are "no additional dealer fees" or when "fees [are] not disclosed." CarGurus also added a filter to show only listings that include dealer fees.

The city says the badges made the problem worse in some cases. Its Honda CR-V example says a listing marked "includes dealer fees" counted only a $175 documentation fee, while the fine print listed $3,685 in other fees. The complaint counts at least 149 misleading fee badges between April 30 and June 29, 2026.

In a June 24, 2026 update, CarGurus said that starting July 14, 2026, used listings without disclosed fees would get "No Rating" and move lower in search results. The city says that change did not fix listings that disclosed only some fees while burying others.

The complaint also targets the AI chatbot on CarGurus's website. It says shoppers can ask it for lists of "Great Deals" and "Good Deals" in New York City, and the results do not show the listing disclaimers or descriptions where extra fees appear. DCWP issued a policy statement in September saying the city's consumer protection law covers representations made by chatbots and other AI systems, according to the press release.

Treat deal labels as a starting point A "Great Deal" rating compares a listed price with a market estimate. If the listed price leaves out fees or conditions, the rating can be wrong. Read the full listing, including any expandable disclaimer, before relying on a savings figure.

Three years of warnings, according to the city

The complaint lays out a timeline that the city says shows CarGurus knew about the problem:

July 27, 2023: DCWP sent CarGurus a cease-and-desist letter about "Great Deal" ratings on listings with hidden fees and conditions.
September 15, 2023: CarGurus responded through its lawyers. The city says CarGurus promised to finish fixes in 2024.
December 27, 2024: The FTC sued Lindsay Chevrolet in Virginia over misleading ads that the complaint says appeared on CarGurus.
May 8, 2025: DCWP sent a second cease-and-desist letter saying the conduct was continuing.
April to July 2026: CarGurus rolled out fee badges and announced its "No Rating" policy.
October 5, 2026: The city filed suit.

Because CarGurus responded to the first letter in September 2023, the city argues every violation since then was "knowing," which carries the highest penalty under city law.

There is nothing to join This is a city enforcement lawsuit, not a class action. Ignore any message offering to sign you up for a CarGurus settlement or asking for payment or personal details to "join" the case.

What the city is asking for

The complaint has three counts under New York City Administrative Code section 20-700:

Misleading deal ratings and fee disclosure badges, at least 1,360 violations
Misleading "below market" savings figures, at least 2,017 violations
Falsely representing that CarGurus enforces its own pricing guidelines, at least 2,218 violations

City law sets penalties of $350 to $2,500 per violation, or $3,500 for a knowing violation, and treats each day a misleading statement is shown as a separate violation. The city asks for $3,500 per knowing violation. The complaint does not state a total dollar figure.

The city also asks the court to bar CarGurus from labeling listings as "Great Deals" or "Good Deals," marking them "price includes fees" or publishing savings figures unless it ensures the listings' disclaimers do not change the price or the offer. It also seeks restitution to "all affected customers in an amount to be determined at trial" and the city's investigation costs.

What CarGurus says

CarGurus published a statement from CEO Jason Trevisan on October 15, 2026. He said the company is "deeply disappointed" and "surprised" by the suit given what he called its "open collaboration" with DCWP.

"Their claims don't reflect the facts," the statement says. It notes that CarGurus was the first car shopping site to require dealers to disclose mandatory dealer fees, not including government fees, on used car listings to keep their deal ratings. It says listings without fee information get "No Rating" and rank lower, and that a Trust and Safety team uses AI tools and human review to remove deal ratings, pricing or dealers that break its rules.

The statement also says CarGurus gives top deal ratings to a smaller share of used inventory than competitors and that it is the only car shopping site, compared with four named competitors, that labels listings "Overpriced." It concludes, "We reject the DCWP's claims and will defend the company vigorously."

What car shoppers can do

This is a city enforcement case, not a class action. There is no claim form and nothing to join. If the city wins restitution, the court would decide how it is paid.

New York City residents who believe they paid hidden fees on a car purchase can file a complaint with DCWP by calling 311 or visiting nyc.gov/dcwp. For class actions and settlements accepting claimants now, see our list of class action cases you can join.

When shopping online for a used car anywhere:

Ask for an itemized out-the-door price before visiting
Ask whether the price depends on dealer financing, a down payment or a trade-in
Open every expandable disclaimer and description on the listing
Compare the total price, not the headline price, with market estimates

What remains unclear

CarGurus's legal defense. CarGurus has publicly rejected the claims, but its formal answer or motion to dismiss was not available as of October 20, 2026.
The violation count. The press release says "more than 2,000" violations. The complaint's three counts total at least 5,595. The court will decide how violations are counted.
Restitution. The complaint does not say how many consumers paid more than they expected or how much restitution the city will seek.
The dealers. The complaint names several dealers, but they are not defendants. It is not known whether DCWP is taking separate action against them beyond the license denial it mentions for Elite Mitsubishi.
The proposed junk fee rule. DCWP said in July that it proposed a rule requiring businesses to advertise total prices including mandatory fees. Whether and when it takes effect is not settled.

This article is for information only and is not legal advice.

Frequently asked questions

Is the CarGurus lawsuit a class action?

No. It is an enforcement action by the City of New York and DCWP under the city's Consumer Protection Law. Consumers cannot join it or file a claim.

What is CarGurus accused of?

The city says CarGurus labeled used cars as "Great Deals" or "Good Deals" and showed "below market" savings based on prices that left out required fees, down payments or trade-ins. It also says fee badges and an AI chatbot misled shoppers.

Will I get money from the CarGurus lawsuit?

Not automatically. The city is seeking restitution for affected customers "in an amount to be determined at trial." Any payment process would depend on how the case ends.

Does CarGurus admit wrongdoing?

No. CEO Jason Trevisan said the claims "don't reflect the facts" and that the company will defend itself vigorously.

What fees did the complaint say were hidden?

Examples include "Prep & Destination" of $1,995, a $995 "Conveyance Fee," a $695 "Admin Fee," a $1,995 pre-delivery service charge and prices that assumed a 20% down payment.

Does this affect car shoppers outside New York City?

The lawsuit concerns listings shown to New York City consumers under the city's law. It does not cover shoppers elsewhere, though the shopping tips in this article apply anywhere.