Monday, March 18, 2019
A POORLY WRITTEN FLORIDA LAW INEFFECTIVELY “REGULATING” DEALER FEES - by Earl Stewart
The Florida statute addressing the Florida Deceptive and Unfair Trade Practices Act clearly states (and I quote), “The advertised price must include all fees or charges that the customer must pay, including freight or destination charge, dealer preparation charge, and charges for undercoating or rustproofing. State and local taxes, tags, registration fees, and title fees, unless otherwise required by local law or standard, need not be disclosed in the advertisement.” I’ll translate that confusing, redundant, lengthy, outdated, and inaccurate paragraph. All vehicles advertised for retail sale must include all charges to the customer except government fees for sales tax and license and registration.
Almost no car dealership in Florida complies with this law. Some ignore it entirely, some disclose in the fine print only one, not all, of their non-government fees. Some state that there are fees added to the advertised price but don’t state the amount, some state the amount of one of their hidden fees in the fine print, but don’t INCLUDE it in the price.
Florida law does not regulate the amount of the dealer fee, allowing dealers to charge different amounts ranging from a few hundred to a few thousand dollars.
Florida law does not regulate the name of the dealer fee so that the buyer can readily identify it. Few car dealers call their hidden fees “dealer fees”; Dealer Fee has become a generic term for the imaginative names chosen by dealers such as tag agency fee, e-filing fee, electronic filing fee, documentary or doc fee, dealer prep fee, notary fee, dealer services fee, administrative fee, etc...
Florida law does not limit the number of dealer fees a dealer may charge. Rather than having one huge fee, most dealers today have several large fees by different names.
These hidden fees are often not revealed in the paperwork seen by the customer when the vehicle sale is consummated. Dealers often use documents labeled “worksheets” or “Internal documents” with fine print indicating that it is not a legal document of the sale. The official document, vehicle buyer’s order, is printed out in the Finance office along with “reems” of other documents like the installment sale or lease contract, odometer form, power of attorney, extended warranty, maintenance contract, GAP insurance, etc. No customer has the time or inclination to read all the fine print on all the documents. A high percentage of Florida car buyers are unaware they were charged these hidden fees.
This statute states, (and I quote) A dealer shall not “charge a customer for any predelivery service required by the manufacturer, distributor, or importer for which the dealer is reimbursed by the manufacturer, distributor, or importer.” Also, the Florida statute states (and I quote) “Must not charge a customer for any predelivery service without having printed on all documents that include a line item for predelivery service the following disclosure: This charge represents costs and profit to the dealer for items such as inspecting, cleaning, and adjusting vehicles, and preparing documents related to the sale.” The language of the Florida statute is confusing and contradictory. First it says dealers can’t charge for predelivery service if they’re reimbursed (plus paid a profit) by the manufacturer for this. Then, in the same paragraph, the statute requires that the dealer disclose their fee represents costs and profits for inspecting, cleaning and adjusting vehicles. All new car dealers are reimbursed for their costs and a dealer profit by their manufacturer for all predelivery service to the new car.
Finally, almost no car dealers disclose in an addendum alongside the federally mandated Monroney Label (MSRP) their additional fees. This law which became effective in 1958 was to give car buyers a consistent basis for comparison of prices for the same year-make-model-accessorized car between different car dealers. Before the Monroney Label, all car dealers would price their cars differently. The higher they priced their cars, the higher they could advertise their discounts or offer in trade-in allowance. With the Monroney label MSRP, car buyers were supposed to be able to fairly compare discounts and trade-in allowances. The hidden fees from several hundred to several thousand dollars make this impossible and violate the spirit and intent of the federal Monroney MSRP sticker.
501.976 Para. 16-18
Florida Deceptive and Unfair Trade Practices Act
(16) Advertise the price of a vehicle unless the vehicle is identified by year, make, model, and a commonly accepted trade, brand, or style name. The advertised price must include all fees or charges that the customer must pay, including freight or destination charge, dealer preparation charge, and charges for undercoating or rustproofing. State and local taxes, tags, registration fees, and title fees, unless otherwise required by local law or standard, need not be disclosed in the advertisement. When two or more dealers advertise jointly, with or without participation of the franchisor, the advertised price need not include fees and charges that are variable among the individual dealers cooperating in the advertisement, but the nature of all charges that are not included in the advertised price must be disclosed in the advertisement.
(17) Charge a customer for any predelivery service required by the manufacturer, distributor, or importer for which the dealer is reimbursed by the manufacturer, distributor, or importer.
(18) Charge a customer for any predelivery service without having printed on all documents that include a line item for predelivery service the following disclosure: “This charge represents costs and profit to the dealer for items such as inspecting, cleaning, and adjusting vehicles, and preparing documents related to the sale.”