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Dealer Conveyance Fees Impacted by New Law

Car and Money.jpgWhen the clock ran out on the Connecticut General Assembly's 2015 legislative session on June 3, many high-priority bills had not received final votes. A special session was called to consider revising the state budget and to address other issues. The legislature approved, and Governor Malloy signed, a  massive "Implementer Bill" on June 30, 2015.  The new law includes provisions that will dramatically change the way that car dealers charge consumers for dealer conveyance fees.

Conveyance fees are supposed to compensate auto dealers for the cost of processing the paperwork, registering the vehicle, and closing the sale. Consumer advocates have complained that the fees are sources of hidden profit and that dealerships lure consumers with artificially low car prices only to add large conveyance fees. The average fee in Connecticut in 2011 was $357, and some dealerships charge as much as $799.

Under the new law, car dealerships will be required to prominently disclose the conveyance fee in any advertisement that includes the price of a car. Dealerships are also now required to give consumers a written statement informing them of the fee and advising them that the fee is negotiable. The form will also inform consumers of the services that are provided in return for the fee and give them the option to perform some of those services themselves. So, cash buyers can handle the registration themselves and save a significant portion of the fee.  

The new law will also require car dealers to submit a report to the Legislature advising the amounts charged for conveyance fees and explaining how those fees were determined. The apparent purpose of this provision is to enable the Legislature to determine whether the fees are fair compensation for conveyance services, as claimed by the car dealer's lobby, or whether they are hidden profits, as claimed by consumer advocates.  Perhaps the legislature will implement a cap on fees in a future session - one competing bill that did not become law would have limited the fee to $75.

Dealerships that violate the law by not including the fees in their advertisements or by failing to give consumers the required written statement will face a fine of $1,000. Additionally, any consumer who has suffered a financial harm due to a violation will have the right to sue the dealership for unfair trade practices.

 

 

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