Are You Passing on All Eligible Fees to Customers?

By Guest Blogger Phil Lathrop
VP Auto Sales
TIADA Chairman of the Board

One great thing to do at the start of the year is to make sure you are passing on all eligible fees to your customers.

Like many of you, I wanted to make sure I knew what was what, with the new process and handling fee that will be appearing on our Title Application Receipt, or what I call a “white slip”. I transfer in Dallas County.
I pulled out a white slip from a fairly new deal and looked it over. As I wasn't personally doing my own title work, I had not focused on one in quite some time. What I discovered was sadly informative. In addition to the new process and handling fee, I discovered our DMS was not set up to charge for a $5 Buyers Tag Fee, a $1 Reg Fee-DPS, a $1 automation fee and a $14.25 Inspection Fee-OBD. This made the new process and handling fee (P&H) seem minor by comparison.

I called our new Compliance and dealer watchdog, attorney Amber Hackett-Crosby at the TIADA office, to get straightened out. Amber explained the P&H charge was $4.75 and the Automation Fee of $1 was going away. This charge started January 1, 2017, on transfers done after that. So ok, I can charge an additional $3.75 to the customer.

The great part was, I started charging the fees I had been missing, the main ones being $20 for inspections (varies dealer to dealer but must be verifiable in an audit) and $14.25 for Inspection Fee-OBD. This was $34.25 of fees I was not charging the customer.  It adds up big.

Editor's Note: The chart below details the maximum charges for various vehicle inspection types in Texas.  Dealers will continue to be reimbursed for actual costs incurred in completing an inspection. The customer can be charged for all actual costs.

I discussed this enlightenment with TIADA Director Jeff Martin. He reminded me as well, the TIADA sponsored $150 doc fee safe harbor can offset some of the missed fees I had lost, and take some of the sting out of not being on top of the situation. Anyone not charging the $150 doc fee should consider it and call the TIADA for the procedure to ensure compliance with the State.

Bottom line, there is no one answer fits all from the TIADA as all counties in Texas can have different fees. Do what I did, get out a white slip and compare it to your purchase agreement. Make sure you are recouping all you can legally from the customer. If you have a question, call your local tax office first and then the TIADA.

I hope I am the only dealer in Texas that was missing out on collecting fees, but somehow I think there may be others. Check it out!
One Year Safety $7.00 $7.50
Safety Only  (vehicles 25+ years) $7.00 $7.50
Two-Year Safety (new vehicles) $7.00 $16.75
Commercial $40.00 $22.00
Trailer/Motorcycle $7.00 $7.50
Safety Emissions (El Paso) $18.50 $8.25
Safety Emissions (Travis & Williamson) $18.50 $10.25
Emissions Test
(vehicles 1995 and older, DFW/Houston areas)
$31.50 $8.25
Emissions Test
(vehicles 1996 and newer, DFW/Houston areas)
$25.50 $14.25
Emissions –only vehicles
(El Paso)
$11.50 $2.75
Emissions-only vehicles
(Travis & Williamson)
$11.50 $2.75
Emissions-only vehicles (ASM) (DFW/Houston areas) $24.50 $2.75
Emissions-only vehicles (OBD) (DFW/Houston areas) $18.50 $8.75

Counties requiring emission tests:

Brazoria, Collin, Dallas, Denton, Ellis, El Paso, Fort Bend, Galveston, Harris, Johnson, Kaufman, Montgomery, Parker, Rockwall, Tarrant, Travis and Williamson


By: Russell Moore
On: 01/12/2017 15:35:48
Do we have to itemize the p/h fee or can we include that with the transfer fees on the RIC? Currently we are charging $33 transfer fee, $5 plate fee, $77 license fee (includes 14.25 inspection), and 25.50 for the remainder of the inspection fee. Are these fees listed correctly or acceptably on the RIC, and where do we need to put the 3.75 for p/h that we are not currently charging?
By: Amber Hacket Crosby
On: 01/19/2017 10:28:39
Good morning Russell,

To answer your first question, yes, the $4.75 p/h fee should be listed as its own line item on the RIC. It only needs to say "Processing and Handling Fee"? as the descriptor.

Your other itemized charges sound fine. I attached the TxDMV Dealer Manual, Section 5, that deals with RICs and the required terms. Section 5.9 is particularly helpful. A good rule of thumb is that if you can directly tie an itemized charge to the sale of the vehicle, then you can pass that charge along to the customer.

In the future if you need any assistance please don't hesitate to reach out to us via our Compliance Consultation Service.

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