Wisconsin permits an automobile dealer to charge a “service fee” for services related to complying with state and federal laws and regulations. This article will identify the items that may be included in a service fee as well as how those fees must be disclosed.
Wis. Admin. Code § Trans. 139.05(8), an administrative rule promulgated by the Wisconsin Department of Transportation, governs service fees. Service fees are fees charged by an automobile dealer for completing any sales— or lease—related inspections or forms which are required by law or administrative rule. Service fees are dealership fees, not government—imposed fees, and are not required by federal or state law. Service fees, according to the rule, must be reasonable.
To charge a service fee, an auto dealer must disclose the amount of the fee on the Wisconsin Buyers Guide—if a used automobile—or on the supplemental label—if a new automobile. The auto dealer must also include the following disclosure on the automobile purchase contract or lease contract:
A service fee is not required by law, but may be charged to motor vehicle purchasers or lessees for services related to compliance with state and federal laws, verifications and public safety, and must be reasonable.
Once disclosed to a prospective purchaser, a service fee may not be increased. However, a service fee may be decreased. The administrative rule’s specification that a service fee may not be increased, but may be decreased, indicates that services fees are, in fact, negotiable.
Some of the items that may be included in a service fee include:
- Conducting automobile title, history and safety checks
- Conducting pre-sale inspections
- Searching for any manufacturer recalls
- Filing and clearing liens
- Maintaining vehicle records
- Training staff on legal requirements and business procedures related to the law
- Completing legally required forms
An auto dealer must provide a written disclosure identifying the services included in any service fee upon request from any prospective purchaser. Furthermore, under the administrative rule, the Wisconsin Department of Transportation has the right to audit service fees to determine whether the fees are reasonable.
An auto dealer may also assess a service fee for processing or distributing an original or renewal registration or a certificate of title. Any fee charged for these services must also be fully disclosed to prospective purchasers.