New York Attorney General Letitia James announced on September 16, 2026, that two Westchester County car dealerships in Mt. Kisco, DARCARS Lexus and DARCARS BMW, will pay more than $1 million in refunds to car buyers and lessees who were overcharged through a misleading “sales commission” fee and an add-on package presented as mandatory. The dealerships will also pay $700,000 in penalties. Customers charged after May 2022 will be able to seek additional refunds through a claims process that, the state said, could bring total consumer refunds into the millions of dollars.
A 2 percent “sales commission” that never reached the salesperson
The settlement covers DARCARS of Railroad Avenue, Inc., which operates as DARCARS Lexus, and MT Kisco Automotive, LLC, which operates as DARCARS BMW. According to the Attorney General’s announcement, the office opened its investigation in February 2022 after a customer complained that DARCARS Lexus had added a “sales commission charge” of more than $700 to a purchase without explanation.
Investigators found that DARCARS Lexus began charging the fee in October 2021 and DARCARS BMW followed in August 2022. The charge equaled 2 percent of the deal and appeared as a pre-printed line in sales and lease contracts. Although the line was marked “not required by law,” the dealerships did not tell customers that the fee was voluntary or that it was not needed to buy or lease a car. The money never went to the employee who made the sale.
When customers asked about the charge, the state said, they received inconsistent, vague or misleading answers. Some were told it was a “standard dealer fee.” Others were told it directly paid their salesperson, and some were told it was required to “offset costs and commissions.” The Attorney General’s office said all of those explanations were false. Meanwhile, the dealerships’ websites advertised prices that left the fee out, making them look competitive with other local dealers. By applying the fee to nearly every sale and lease, the office said, the stores generated millions of dollars in additional revenue.
A claim form is coming. DARCARS customers charged after May 2022 will receive claim forms by mail, and the four-date rule for reading a settlement notice shows which date on that form actually controls payment in The Settlement & Refund Recovery System.
The “DARCARS Assurance” package and its 60-day catch
The second practice involved a bundled aftermarket product called “DARCARS Assurance,” which the dealerships added to sales and lease agreements without properly informing customers. The bundle included items such as a collision credit and a stolen-vehicle credit that, according to the state, had little value to buyers.
The collision credit illustrates the problem. It was advertised as covering up to $2,500 of an insurance deductible if the vehicle was declared a total loss. But the payout was available only if the customer bought or leased another vehicle from the same DARCARS dealership within 60 days of receiving the insurance settlement. The Attorney General’s office described it as “essentially a loyalty coupon” that provided no immediate financial relief to people involved in a crash.
Investigators found that DARCARS did not disclose that the package was optional, leaving customers with the impression that it was a required part of the purchase or lease rather than a costly extra. Under the settlement, DARCARS is banned from offering or selling DARCARS Assurance, or any similar bundle, at any of its New York dealerships.
How the more than $1 million breaks down
The refunds come in three pieces. DARCARS Lexus will pay $892,671.26 to reimburse every customer who was charged the sales commission fee between October 23, 2021, and May 30, 2022. Both dealerships will pay $116,849 to customers who were misled into buying DARCARS Assurance and complained to the Attorney General’s office. Other customers who told the office about the sales commission fee will receive a combined $164,998.72. The last two amounts make up $281,847.72 in additional reimbursements.
Customers who paid the fees but are not covered by those payments will be mailed claim forms, and the dealerships must pay restitution to anyone who submits a valid claim. DARCARS has stopped charging sales commission fees, must clearly disclose all future fees and add-on products, and must provide annual fair-business-practices training to sales, finance, marketing and advertising staff. The $700,000 penalty is separate from the refunds.
“New Yorkers save up for years to buy a car, and they deserve fair prices without junk fees that drive up the cost with useless add-ons,” James said. “DARCARS took advantage of hard-working New Yorkers, charging them thousands of dollars in misleading fees. My office is making sure that every New Yorker who was defrauded by these dealerships gets their money back.”
The case was handled by Assistant Attorney General Sandra Giorno-Tocco with investigators from the office’s Westchester Regional Office, under Assistant Attorney General in Charge Andy Aujla.
What past DARCARS customers should keep and watch for
For many older New Yorkers, a car is one of the largest purchases they make in retirement, and a 2 percent charge adds up quickly: on a $50,000 vehicle, it comes to $1,000. Anyone who bought or leased from DARCARS Lexus or DARCARS BMW in Mt. Kisco since late 2021 has reason to pull out the contract and look for a “sales commission” line or a DARCARS Assurance charge.
Those documents matter for the claims process. Customers charged after May 2022 are expected to receive claim forms by mail, and keeping the original buyer’s order, lease agreement and financing papers together will make it easier to show what was paid. Customers who have moved since the purchase may want to confirm that the dealership has a current mailing address, since the claim forms are being sent by mail.
The DARCARS agreement follows earlier dealership cases by the same office, including settlements with 15 Nissan dealerships in New York City and on Long Island that delivered more than $4.5 million in restitution and $1 million in penalties. The Attorney General’s office continues to ask consumers who believe they were misled by dealership fees or lease practices to file a complaint with the office.
Turning a dealership settlement into money actually received
A refund announced by the state is not the same as a check in the mailbox. DARCARS customers outside the automatic payments will need to spot the claim form, return it on time and follow up if nothing arrives.
The Settlement & Refund Recovery System includes the four-date rule for reading a settlement notice, a claim log and payment tracker, and a step-by-step filing walkthrough, which fit the job of tracking a dealership claim from the day the form arrives to the day payment lands.
Keep the DARCARS claim organized with The Settlement & Refund Recovery System.
This article was prepared with AI assistance and reviewed against the linked official sources.
Warren Cohen is a finance writer based in Phoenix, Arizona, covering personal finance topics including credit, banking, and beginner investing. He earned his degree in business administration from Arizona State University and began his career working in consumer finance, where he gained direct experience with lending and credit systems. He now writes for personal finance websites and fintech platforms, focusing on clear, practical content that helps readers make informed financial decisions.
