Paying car registration online? Watch for fee bumps
Chester Specht recently went online to renew his car registration. He Googled “DMV renewal” and clicked on the top listing.
“Complete your vehicle registration in 3 simple steps,” the website said, leading Specht through a straightforward process.
He paid using a credit card. The registration tags arrived in the mail not long after. Easy peasy.
FOR THE RECORD:
Car registration: A column in the Feb. 7 Business section about online auto registration quoted Jessica Gonzalez, a California Department of Motor Vehicles spokeswoman, as saying that fee-charging online companies don’t have access to the DMV’s system. She acknowledged later that the companies have “limited access” to the DMV’s system so they can process their customers’ renewals.
It wasn’t until Specht’s wife, Phyllis, looked at the receipt weeks later that the Pasadena couple realized something was hinky.
“The DMV bill was for $148,” she told me. “But the receipt was for $183.64.”
And there’s a good reason for that: Her husband never reached the website of the California Department of Motor Vehicles, where you can renew your vehicle registration at no extra charge.
He landed instead at the site of one of hundreds of private companies licensed by the DMV to provide the same online services but with significant fees attached.
The company, Cartagz, boasts of being “California’s leading vehicle registration service,” offering a “higher level of customer service and efficiency.”
The question is: What is the Cartagz website offering for an extra $35 that the DMV’s site doesn’t offer?
And could unwary consumers be easily duped into thinking they’re renewing with the DMV when they’re actually dealing with Cartagz?
“I thought I was on the official website,” Chester Specht, 86, said. “It came up first in my search and it looked official.”
On the official DMV site, though, it clearly says that no extra fee is charged for renewing a registration online.
On the Cartagz site, you have to click on the Fees tab to learn that a $29 service fee is levied to process a renewal. In Specht’s case, there also was a $4.14 convenience fee, plus a $2.50 shipping fee for his registration tags.
That’s a 24% mark-up. For what?
I tried to put that question to Cartagz, but no one at the company returned my calls or email.
Jessica Gonzalez, a DMV spokeswoman, said more than 1,800 companies are licensed by the state agency to serve as an intermediary for registration services. They handle about 1.2 million vehicle registrations a year.
These companies aren’t actually issuing the registration tags. Gonzalez said they don’t have direct access to the DMV’s computers. They’re merely passing along a motorist’s service request and cutting themselves in for a healthy fee for their trouble.
So why would anyone use such services?
“I can’t say why people would go to them,” Gonzalez replied. “You should always make sure you’re on the DMV’s website.”
If that’s the case, though, why is the DMV in bed with these guys? The answer to that, perhaps, is because it’s a nice little revenue generator.
There’s a $150 fee to apply to run an online registration service like Cartagz. If the DMV grants a license, a company has to pay $15 twice a year to keep its permit active.
That means the 1,800 companies licensed to provide registration services have ponied up $270,000 in application fees. They also cough up $54,000 a year in license-renewal fees to the DMV.
How hard is it to get such a license? Not so hard, apparently. All you need to do is submit the proper forms, pass a background check and obtain the appropriate surety bond and business license.
You’re asked during the application process if you’ve had any misdemeanor or felony convictions, but this isn’t a deal-breaker.
“As long as your paperwork checks out, you’re good to go,” a staffer at the DMV’s occupational licensing division told me when I asked if a felonious past would keep me out of the game.
The DMV has oversight over various businesses, including car dealers and driving schools. If people were required to visit a DMV branch to register their vehicle or perform other tasks, I could see how a private company could offer value by providing an easier process.
But with almost all DMV services available free on the agency’s website, I’m not sure what these companies offer that in any way justifies the fees they charge.
The testimonials on the Cartagz website indicate that customers are pleased with the convenience and speed of the firm’s service.
After thinking about it a bit, the DMV’s Gonzalez got back to me and said companies like these can be helpful for more complicated issues, such as a vehicle ownership transfer or a business owner with a large number of vehicles to register.
“There are many possibilities that people would prefer to pay a service charge,” she said.
Perhaps. Or, like the Spechts, you can make sure from now on that you’re actually on the DMV’s site — https://www.dmv.ca.gov — and pocket that $35 for yourself.
David Lazarus’ column runs Tuesdays and Fridays. He also can be seen daily on KTLA-TV Channel 5 and followed on Twitter @Davidlaz. Send your tips or feedback to email@example.com.
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