Under a Connecticut law that went into effect last June, car dealerships must disclose their dealer conveyance fees in any advertisement of car prices. Dealerships must also give consumers a written statement of the fee and inform them that the fee is negotiable.
Dealers must also tell consumer the amount of the conveyance fee before negotatinga price for the car. They are no longer permitted to add the fee when presenting the contract documents. Dealerships must also tell consumers that the fee is negotiable.
Dealerships justify conveyance fees by claiming that they are fair compensation for the cost of processing the paperwork, registering the vehicle, and closing the sale. Consumer advocates complain that the fees are sources of hidden profit permitting dealerships to lure consumers with artificially low car prices only to add large conveyance fees. The new law is supposed to curb that practice.
Dealerships are, for the most part, ignoring the law.
Our review of advertisements in publications and on websites show that the most dealerships are not disclosing their conveyance fees. So, consumers still go to dealerships having no idea that the car that they saw advertised may cost up to $799 more than the disclosed price.
Additionally, many of our clients who have recently bought cars have informed us that they were never given the written disclosures regarding conveyance fee. Most of them did not know about not know about the fee until they saw it on their contract documents, and many did not know they were charged large conveyance fees until after we showed it to them on their papers.
It is reasonable to expect that dealerships will require some time to learn about the new requirements and to conform their practices. But, dealerships have now had four months to get their act together.
The law imposes fines of up to $1,000 for violations of the advertising requirements. Additionally, car buyers who were not given the disclosures may be able to sue the dealership for damages, punitive damages, and attorney's fees.
The Connecticut Department of Motor Vehicles should put dealerships on notice that they must start complying with these requirements. And, Consumer Law Group is putting dealerships on notice that if any of our clients have been harmed by illegal practices, they may be hearing from us as well.