Be cautious about tacking fees to repair orders

Donna Harris covers automotive retailing for Automotive News.
We’ve taken a look at how dealers must be careful about adding fees to the vehicle price because these processing fees are often regulated by the state.

However, the fees dealers commonly charge in the shop to recover the cost of supplies or compliance with environmental rules often aren’t regulated. The “regulatory calm,” though, might not last, says McLean, Va., dealer attorney Mike Charapp.

Shop fees face challenges when they appear to be deceptive. For example, the fee has a name that makes it look like the proceeds are going to the government. The dealer must make it clear the fees will go to the shop.

Charapp, who works with the Virginia Automobile Dealers Association and the National Automobile Dealers Association, offers the following advice:

• Let your customers know up front what fees they can expect to pay -- don’t wait until they pick up the car after service.

• Post any fees.

• Disclose fees on brochures and forms, such as night-drop tickets.

• Make sure multiple fees don’t overlap. A regulator or plaintiff’s attorney may think the customer is being charged double.

• Be prepared to justify fees charged to the customer.

Says Charapp: “If you are sued and asked in a deposition how you justify the percentage fee charged for shop supplies, will you reply: ‘It looked like the right number’ or will you reply: ‘We did an accounting study.’ It is always better to justify your position with hard numbers.”