Missouri set to raise car dealer fees

The Missouri Department of Treasury released the new rule this week, increasing the current $500 maximum administrative fee charged by auto dealerships by $65 to reflect the rise in the consumer price index.

The original fee, which was set at $200, was raised last year to allow merchants to collect administrative fees that help pay for updates to the state’s aging computer systems.

The emergency rule comes into effect on February 14, at a time when prices for new and used cars are slowly retreating from the pandemic-related price spikes of the past two years.

The modernized vehicle database, estimated to cost up to $105 million, would streamline the state’s cumbersome process for naming vehicles and issuing and renewing registrations and driver’s licenses.

Currently, motorists may need to make multiple stops to collect the various documents required for license and title work approvals. That proved difficult for some during the COVID-19 pandemic, when dozens of state licensing offices were temporarily closed over concerns about the spread of the deadly virus.

“The current motor vehicle and driver’s license system consists of over 50 legacy systems, many of which do not ‘talk’ to each other. Many of these were established more than 40 years ago,” said Treasury spokeswoman Anne Marie Moy.

It’s a familiar refrain across the state government, which has underinvested in computer upgrades in recent years, prompting calls for an overhaul of all of the state’s aging information technology platforms.

The additional fees come as Sen. Lincoln Hough, R-Springfield, and Sen. Angela Mosley, D-Florissant, passed legislation that would require auto dealerships to collect and remit sales tax, rather than requiring motorists to pay the tax to the department immediately afterwards They drive their vehicles from the dealer’s premises.

If approved, the change would take effect on January 1, 2024 as part of the rollout of the updated computer system.

In the year the higher fee was approved, the state’s Automotive Technology Improvement Fund grew to $18.4 million.

But not all merchants participate in the government fee collection program.

According to Moy, there are 827 traders who report that their trader charges an administration fee from an estimated 5,014 traders who qualify.

And among those that charge, the average is $298. Under the new program, the state gets 10% of that fee to pay for the upgrades.

A contract to build the integrated system could be awarded by the end of February, with work on the upgrades beginning as early as March.

Moy said the department envisions a “customer-centric” vehicle licensing system that will improve motorist interaction with the department when it comes to vehicle registration and titling.

“Missouri citizens have access to all of their vehicle and driver’s license information in one convenient portfolio,” she said in an email to Post-Dispatch.