New York City says CarGurus misled shoppers with “Great Deal” ratings that failed to account for mandatory fees, putting online vehicle pricing and the platform's AI chatbot under scrutiny.
The New York City Department of Consumer and Worker Protection (DCWP) filed suit against CarGurus on October 15, alleging more than 2,000 violations of the city's consumer protection law. The complaint accuses the online automotive marketplace of promoting vehicles as bargains even when additional fees, down-payment requirements or trade-in conditions could change the actual price.
The case puts a spotlight on an issue that affects both sides of the used-car transaction: whether shoppers can compare advertised prices accurately across dealerships.
One Honda listing illustrates the dispute
In one example cited by the city, a 2018 Honda offered by Elite Mitsubishi appeared on CarGurus in June 2026 at $2,212 below market value, earning a “Great Deal” rating.
But mandatory fees disclosed lower on the listing changed the calculation, according to DCWP. The city said the vehicle's actual price was $1,473 above market value.
The agency also alleges that CarGurus' AI chatbot generated lists of supposed deals without adequately accounting for the same pricing issues. The city says an analysis of more than 40,000 online vehicle listings found mandatory fees added an average of approximately $1,100 to advertised prices.
DCWP is seeking a permanent injunction and civil penalties. The allegations have not been proven in court.
CarGurus disputes the allegations
CarGurus CEO Jason Trevisan said the company was disappointed by the lawsuit and rejected the city's claims, pointing to its history of developing pricing-transparency tools.
The company introduced updated dealer pricing requirements in July, requiring subscribing dealers to disclose mandatory fees to retain Deal Ratings. Listings without fee information can receive a “No Rating” designation and lower search placement.
CarGurus also added pricing labels and filters to help shoppers identify listings that include fees. Its updated dealer pricing policy, published October 13, says advertised prices must include mandatory dealer-imposed charges, with exceptions for government fees such as tax, title and registration.
The city, however, alleges those measures have not adequately prevented misleading listings. The dispute now raises questions about whether the platform's own ratings and comparison tools accurately reflect the prices shoppers will actually pay.
Bottom Line
For dealers, the issue extends beyond one marketplace. When a listing excludes mandatory charges but still earns a favorable deal rating, a dealer advertising a more complete price can appear more expensive beside competing vehicles.
That creates a potential competitive disadvantage for stores trying to present accurate, all-in pricing online. It also puts greater importance on ensuring that inventory feeds, fee disclosures and advertised prices match the actual terms of a sale. The case adds to the regulatory scrutiny of online vehicle advertising and the role third-party platforms play in displaying dealer prices.
