The Office of Consumer Credit Commissioner (OCCC) has long received questions on how to itemize the different fees a customer pays when buying a car. A new program has raised new questions regarding the disclosure of inspection charges on a retail installment contract. Beginning March 1, 2015, the Texas Department of Motor Vehicles implemented the “Two Steps, One Sticker” program for inspection and registration. With the two steps, came two different entities that would collect the inspection fee: (1) to the station performing the inspection and (2) to the county tax assessor that collects the registration fee. The portion of the inspection fee paid to the inspection station is listed in the inspection report. The portion of the inspection fee paid to the state is disclosed in the title application receipt, where it is combined with other registration fees.
Before, when the inspection and registration processes had no direct overlap, the two fees were itemized in the amount financed separately. The Texas retail installment contract contains specific itemized disclosures for both registration fees inspection fees. Now that there is overlap regarding who collects the fees, the Finance Commission has promulgated rules to provide clarity.
A dealer may choose one of two options for the itemization of inspection fees. The first option is a combination method where the portion of the fee that goes to the state is itemized in the “license and registration” field and the cost paid to the inspection station is itemized in the vehicle inspection field. This option may make sense to dealers who want the ease of matching fees on the title application receipt (VTR-500-RTS) to charges on the contract.
The second method allows dealers to disclose the entire inspection amount (one part to the state and one part to the inspection station) in one line item. This may sound familiar but there is one important
Two Steps, One Sticker,
Two Disclosures
By Rudy Aguilar