Purchaser’s On-Line Systems Filing Fee

We have recently received questions concerning the fee that dealers charge their customer for on-line titling and registration. A little refresher information seems in order.

But first a little review of the implementation of the fee.

In 2003, the Virginia General Assembly enacted legislation to incentivize on-line processing of titling and registration of vehicle by dealers. The General Assembly added § 46.2-1530.1 to the Code of Virginia that reads as follows:

          § 46.2-1530.1. Purchaser’s on-line systems filing fee; collection and remittance.

          Any dealer licensed under this chapter who uses a Department-approved system of       remote electronic filing of documentation necessary to obtain a certificate of title or registration for the purchaser of a vehicle shall collect from the purchaser and remit to the Department-approved electronic systems provider any fees charged for the transaction by the systems provider. Any such fee shall be listed separately on the buyer’s order and identified as “on-line systems filing fee.”

This change made at the request of dealers and the Department of Motor Vehicles (DMV) altered the existing system of compensating dealers for their on-line systems costs. Before the passage of the legislation in 2003, dealers were compensated by DMV for processing title and registration transactions. Compensation was a small percentage of the taxes and fees collected by the dealer. Dealers paid the expenses related to the electronic filing.

With the passage of the legislation, the General Assembly permitted dealers to collect from their customers the actual cost of processing the transaction. The various on-line systems filing vendors changed their billing structures to accommodate the change by making all their charges to dealers on a per transaction basis only, with no additional monthly or equipment charges.

Some things to remember about this fee:

• The statute does not set the fee to allow for the free market to determine what can and will be charged.
• The fee must be disclosed separately on the Buyers Order as an “on-line systems filing fee.”
• If the dealer changes vendors, it must collect what the new vendor charges.
• If a dealer collects the fee from a customer and does not complete the transaction on-line for any reason, the fee must be refunded to the customer.
• The dealer may charge ONLY the actual fees and costs associated with the transaction. If a vendor offers a rebate for the fees collected, a dealer should consult its legal adviser about the extent to which the receipt of the vendor rebate renders the disclosure of the fee invalid, and the potential legal impact of an invalid disclosure.

Please take time to review your procedures for collecting this fee to ensure you are in compliance with Virginia law.