Processing charge cap in Maryland increases July 1and so, too, is the likelihood of increased scrutiny of charge disclosure requirement

Processing charge cap in Maryland increases July 1and so, too, is the likelihood of increased scrutiny of a  charge disclosure requirement

The good news Maryland dealers received at the conclusion of the 2011 General Assembly last spring that the processing charge cap of $100 will increase to $200 on July 1st is grounded in the disclosure requirements that go along with it, cautions MADA which has been holding state law compliance meetings with dealers across the state.

Indeed, Maryland dealers opting to charge vehicle sale customers a processing charge for all the paperwork involved can charge up to $200 come July 1. But any processing charge must be properly disclosed to the customer. Heres how:

· On the buyers order (in 12 point type) Dealer Processing Charge of $___ (not required by law);

· On a window sticker (10 point type) Dealer Processing Charge of $____not required by law;

· If the advertised price doesnt include the processing charge, then the amount of the charge must be disclosed, too, and proximate to the advertised price.

Here again, any processing charge by a dealer is optional and negotiable.

Any consumer inquiring about the processing charge must be told by the dealer what it is and what it is not and that is best done in writing by way of a pre-printed paper or brochure.

The processing charge covers the dealers very real expenses in handling the many and varied papers that need to be completed in connection with the sale and delivery of a motor vehicle. These many and varied papers and tasks should be enumerated for the consumer. What the processing charge isnt is a government tax of any kind, to include the electronic titling requirement. Similarly, the processing charge is unrelated to any application for or extension of credit, as this would be a finance charge.

Dealers need to recall, also, that processing charges are subject to state title/tax when theyre charged.

With all that goes into the disclosure requirements a dealer must observe when implementing processing charges, and because the charge is negotiable, it is important that sales representatives know to involve a manager when processing issues from a consumer arise.

For a separate advisory paper on this subject, click here