TEMPE. Ariz. -- Park your car in the wrong spot and you might end up paying hundreds more than you should to get it back.

Investigative reporter Tammy Leitner found it pays to know what city ordinances say about how much tow companies can charge to avoid a major rip-off.

VIDEO: 5 Investigates Towing Troubles

Leitner put tow companies to the test. She parked a vehicle in a red zone at a Tempe apartment complex where cars were being towed.

It didn't take long for a driver from Qwik Tow to spot the car and start towing it away.

Leitner asked the driver how much it would cost to get the car back.

"It's $180 tonight if we release it and $215 tomorrow," he said.

Leitner told him she didn't have the cash, so the tow driver and his partner offered to drive her to a nearby ATM.

Leitner wondered if the driver was doing her a favor.

"Yeah pretty much, in a way,” the driver said. “It doesn't seem like it, but yeah."

Leitner then identified herself as a 5 Investigates reporter.

"Isn't this basically extorting people so they can get their car back?" she asked.

"I dropped your vehicle,” the driver said. “I've taken down your information and you can talk to my boss tomorrow."

Leitner pointed out that the city ordinance in Tempe says tow operators can't charge more than $120.

"I was thinking we were in Phoenix, which is $180," the driver said.

Actually, the maximum amount a tow operator in Phoenix can charge is $105.

"They're banking on you not knowing the law," said Mary, a tow industry insider, who asked her last name not be used.

Mary said most people don't realize it's against the law to hold a person's car hostage for money, even if it is parked illegally. The tow company can bill a person, or sue a person, but they must release your car.

"They can't hold your car,” she said. “It makes no difference what city you're in."

There’s one exception -- when the tow company is working for the police.

That was not the case with Qwik Tow.

Qwik Tow Owner To Change Policies

Leitner wanted answers from Ron Steele, the owner of Qwik Tow. Steele said it was a mistake for his driver to take $180 from us, but not a mistake to ask for $180.

"The $180 is a negotiation point,” Steele said.

“Maybe once a month we actually have someone that says, ‘Yes, I'll pay that much.’ But you know it's a matter of you not taking it," Steele said.

One man whose car was towed said he felt like he was being held hostage.

Heath, who asked that his last name not be used, said the Qwik Tow driver wanted $300 to drop his car, but he negotiated the fee down to $100.

"It's insane,” Heath said. “It's ludicrous. I was right there. I told him I was right there. I asked him to drop the car."

What he didn't realize is in Tempe there's no drop fee. That means if the car is still on the property when you confront the tow driver, the car must be released at no charge.

"It didn't happen," Heath said.

The owner of Qwik Tow claimed there's no way his driver would ask for $300. But he did agree to change their policies.

"You're saying that because of what happened to us Monday night your drivers are no longer going to negotiate prices, they're going to charge only the maximum amount allowed by the city ordinance?" Leitner asked.

"Absolutely," said Steele.

The issue can be confusing because every city in the Valley has a different tow ordinance. But knowing your rights could save you hundreds.

State Law Protects Consumers

For the most part, cities regulate the towing industry in the valley.

The local government decides if there is a limit on how much a tow company can charge for towing and storing your vehicle.

Some cities also have ordinances. Those laws say that a tow truck operator must release your vehicle if you stop the truck before it leaves the property where you left your car.

In addition, there is a state law that says a tow company cannot hold a person's car for money -- if the person asks for it back.

That means the tow company can bill the person or sue the person, but they must release the car if asked.

The biggest exception is if the tow company is working for the police. Then the person must pay before retrieving the car.