Car Dealers, Fees, and Disclosures

Question: If we buy indirect paper from car dealers and the dealer charges a "dealer fee" to the customer but does not include this fee on the disclosure, is this a violation?

Answer: Yes. Any fee that the dealer charges that is related to credit is probably a finance charge. The only exception would be an application fee that is charged to all customers, whether or not a loan is approved.

Copyright © 1999 Compliance Action. Originally appeared in Compliance Action, Vol. 4, No. 4, 4/99