Dealer processing charge cap increase passes MD General Assembly

Dealer processing charge cap increase passes MD General Assembly

[I]$100 cap rises to $200, effective July 1; MD title fee will increase $50[/I]

In the closing days of the 2011 Maryland General Assembly this week, state Senate and House conferees came together and passed the Budget Reconciliation and Financing Act (BRFA), which included raising the limit dealers can charge consumers for vehicle sale document processing from the current limit of $100 to a new limit of $200. Being part of the budget and finance legislation, the change in the dealer processing charge cap will be effective July 1, 2011. Additionally, there is provision in the dealer processing charge measure which provides for an automatic charge cap increase from $200 to $300, effective three years from now, July 2014. The automatic statutory boost in the processing charge cap for 2014 was recognition on the part of lawmakers that dealer paperwork for vehicle sales is something that is likely to increase over time with the myriad of consumer protection regulations impacting the automobile business.

The dealer processing charge limit increase was made part of BRFA because of the additional title tax it will generate for the state of Maryland, which, like other states, is facing unprecedented budget shortfalls.

Another automobile business part of BRFA is a provision that increases the state fee consumers pay for titles when purchasing vehicles, which will rise from $50 to $100. This, too, will be effective July 1.

Transportation funding legislation that could have come forward in this session did not, but may come forward in a special session this fall. At such time as transportation funding legislation is considered, a large part is likely to focus on the prospect of increasing the state tax on gasoline. This wasnt something legislators wanted to do with the price at the pump currently spiking upward and foremost on the minds of Maryland motorists.

The passage of the BRFA makes the processing charge increase all but a done deal, given the certainty of the governors signature on the legislation.

WANADA salutes the good work of MADA and the team at Rifkin, Livingston, Levitan and Silver for the successful passage of the processing charge cap increase and was pleased to have assisted the effort!

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