diff --git a/src/app/parser.rs b/src/app/parser.rs
index e8729292..75c6fa5a 100644
--- a/src/app/parser.rs
+++ b/src/app/parser.rs
@@ -472,7 +472,7 @@ where
             }
 
             if !(self.is_set(AS::ArgsNegateSubcommands) && self.is_set(AS::ValidArgFound))
-                && !self.is_set(AS::InferSubcommands)
+                && !self.is_set(AS::InferSubcommands) && !self.is_set(AS::AllowExternalSubcommands)
             {
                 if let Some(cdate) =
                     suggestions::did_you_mean(&*arg_os.to_string_lossy(), sc_names!(self.app))
diff --git a/tests/app_settings.rs b/tests/app_settings.rs
index 0a4cb62f..24281d0f 100644
--- a/tests/app_settings.rs
+++ b/tests/app_settings.rs
@@ -762,6 +762,24 @@ fn issue_1093_allow_ext_sc() {
     ));
 }
 
+#[test]
+fn external_subcommand_looks_like_built_in() {
+    let res = App::new("cargo")
+        .version("1.26.0")
+        .setting(AppSettings::AllowExternalSubcommands)
+        .subcommand(SubCommand::with_name("install"))
+        .get_matches_from_safe(vec!["cargo", "install-update", "foo"]);
+    assert!(res.is_ok());
+    let m = res.unwrap();
+    match m.subcommand() {
+        (name, Some(args)) => {
+            assert_eq!(name, "install-update");
+            assert_eq!(args.values_of_lossy(""), Some(vec!["foo".to_string()]));
+        }
+        _ => assert!(false),
+    }
+}
+
 #[test]
 fn aaos_flags() {
     // flags