Auto Dealership Fees Initiative

Auto Dealership Fees Initiative

Attorney General Peter F. Neronha has launched an initiative to end the practice of motor vehicle dealerships charging customers illegal fees and for unwanted products or services and better protect Rhode Island consumers.

As the State’s primary competition regulator and consumer advocate, it is the goal of the Attorney General to ensure that dealers compete for consumers’ business on a level playing field — based on a fair understanding of the prices they charge, the products they sell, and the quality of service they offer.

When businesses compete fairly and openly for business, it benefits consumers, law-abiding businesses, and the wider consumer economy.  Rhode Islanders shouldn’t be paying for add-on products they don’t want, nor for junk fees that siphon money out of the local economy.

Our Office has recently taken several steps to crack down on dealers charging illegal fees or for unwanted services:

  • Entered into a settlement with three Rhode Island dealerships to refund over $450,000 to customers who were charged for a paint protectant and an associated warranty.
  • Entered into a settlement with a Newport-based dealership to end their practice of charging illegal “reconditioning fees.”
  • Warned every dealership in Rhode Island against advertising prices for vehicles they were not willing to honor, including the use of “inventory” or “chip-shortage” fees due to supply issues.
  • Filed a Motion to Enforce a Civil Investigative Demand against a Middletown-based dealership regarding their practice of charging customers for a theft-protection product without first obtaining their express, informed consent to add that product. 

Below are some answers to common questions consumers may have about the types of fees and charges they can expect when buying a new or used vehicle in Rhode Island.  If you believe you have been illegally charged a fee or for a product or service, we urge you to file a complaint with the Office’s Consumer & Economic Justice Unit here.

Dealers are only legally permitted to charge two types of fees when selling a new or used motor vehicle in Rhode Island:  a “documentation” fee and a “title preparation” fee. 

Pursuant to DMV regulations, dealers may charge a Documentary Preparation Fee for up to $400.00 or the paperwork associated with a sale and a “Title Preparation Fee” for up to $20.00 to prepare a title application, sales tax forms, any other forms required to title the vehicle, and to register and title the vehicle at the DMV.

Both fees are entirely negotiable, and dealers are not required to charge you either fee or the full amount of either fee.  The government does not require them to charge you one or both of these fees.

Note that other states may not impose limits on the types and amount of fees dealers may charge – these limits apply to dealerships physically located in Rhode Island. 

Dealers are permitted to include charges for sales tax and registration fees on your bill.  As a service to customers, dealers may offer to register your vehicle for you with the DMV.  To that end, they may include a charge on your bill to pay for the DMV’s registration and titling fees which a purchaser would otherwise have to pay directly to the DMV themselves.

That dealer charge is typically between $100 and $300, which is roughly equivalent to the fees a consumer may pay directly to the DMV.  However, if the DMV’s registration and titling fees are less than the dealer charged, the dealer is obligated to return that difference to you.  On the other hand, if the fee ends up being more than you were charged, they may ask you for an additional payment.

Dealers may not advertise a price for a motor vehicle – such as on a listing on their website or physically on a vehicle – unless that is a price they are willing to sell the vehicle for (other than potentially adding on the Documentation Fee, Title Fee, and sales tax as described above). 

You should not be charged any other fees that were not included in the advertised price, such as fees for reconditioning, vehicle preparation, or state inspection fees.

No, a dealer can advertise and sell a vehicle for any price – even if it exceeds the Manufacturer’s Suggested Price – in order to meet market demand.  The MSRP is a suggested price and there is nothing in state law that legally requires a dealer to sell a car at that price (unless a dealer advertises the MSRP as the price for the vehicle). 

A dealership cannot add a fee or charge to your bill after you have already agreed on a purchase price without first obtaining your express, informed consent.  Dealers may add a charge to your purchase for etching the Vehicle Identification Number onto windows, for applying identification stickers to various parts of the vehicle, or for a spray they applied.  This is illegal unless (1) that charge was included in their advertised price, or (2) they obtained a consumer’s express, informed consent before including the charge. 

A dealer should only charge a consumer for a product or service after receiving their express, informed consent.  That means a customer should only be charged for something if they are fully informed about (1) what the charge is for, (2) the amount of the charge.  A dealer should never add a charge to the total advertised price for a service or product without first explaining what that charge is for and that it is completely voluntary.

It is illegal for a dealer to charge a fee (other than those allowed by DMV regulation) or automatically add a service charge unless they are included in the advertised price of a vehicle.  If a dealership advertises a price (either online, on a window sticker, or when a person inquires), it must be the final, delivered price. 

A dealer cannot charge an illegal fee just because it may be disclosed in the “fine print” at the bottom of a web advertisement or buried on a webpage separate from the vehicle listing.