On Your Side Investigation follows state program dollars from new car fees in Missouri

SPRINGFIELD, Mo. (KY3) – The next time you buy a car, new or used, you might get a $500 fee. It’s in the fine print.

A customer tells On Your Side he was told by law he could not negotiate it. Turns out, it’s a state program that should benefit all Missouri drivers. Yet, not all dealers charge it.

Jeffrey Meyer has no buyer’s remorse. “We’ve taken it to Florida three or four times since we’ve had it. 28.3 miles to the gallon,” he said.

He bought a 2020 Chrysler Pacifica ‘S’ at James River Chrysler Dodge Jeep Ram.

While making the deal, he noticed a $499 administrative fee on the purchase agreement.

“I’ve bought a lot of cars over the years, and I’ve never paid over $199 for a document fee,” he told the salesperson.

He says he was told the money goes to Missouri’s Department of Revenue into the Motor Vehicle Administration Technology Fund. It’s the new modernization program to replace our severely outdated 40-year-old computer system at DMV offices across the state.

“These poor clerks that are in training right now. They have to learn fifty different systems,” said Rod Jetton, Deputy Director of the Missouri Vehicle Drivers License Division of the Department of Revenue. “It’s fifty different passwords to get into those systems because the systems don’t talk,” he said.

“Where’s this system at? I mean, 2026?” asked Meyer.

July 2026 is the target date for the new system. Eventually, dealerships can use it, too. Then, drivers can pay car taxes there and not at the DMV.

“When I first moved down here, it was almost like going back in time,” said John Widiger with Springfield Nissan and Springfield Kia. “Why are we giving titles to customers? Back in Illinois, it was simple. It was done.”

Widiger says the upgrade is necessary.

“It is going to cause us a little more work, but it will be way more convenient for the consumer, and that way, the state gets their taxes right up front,” he said.

Republican State Senator Lincoln Hough agrees it will be good for Missourians.

“A lot of people, when they go and buy a new car, you could often have several thousand dollars in taxes that are owed sales taxes, you can now roll that into your payments,” said State Senator Hough.

Meyer had two major questions.

“Are the dealers really collecting $499 on every car that they sell through the state of Missouri? And if they are, how much is being sent to the state, if any?” he asked.

On Your Side filed a public records request with DOR to find the answers. A few weeks later, we got a 54-page document.

Turns out the fee Meyer paid is a little high. According to a 2021 state law, dealerships can charge whatever they want for that administrative fee of up to $565 per car. Ten percent of that must go to the state fund. Dealerships keep the rest. Not all charge the max. The average is $331. May Motor Company was one of the lowest in the Springfield area at $99.

“I’m tickled about that,” said Mike May, owner of May Motor Company. “But, I’m thinking, oh Gosh, am I leaving money on the table?” He joked. “I’m not saying we’ll stay at $99 forever, but we’re not jumping to $565 next week.”

Car salesmen were quick to tell us it’s not a profit ‘gotcha.’

“We really aren’t. At the end of the day, everyone shops online. So, we take that fee into consideration when we market our pricing. If I’m not competitive with the dealer down the street, then my phone is not going to ring,” said Widiger.

Meyer says he was told he couldn’t negotiate the fee amount. Turns out that is correct.

“If they choose to charge an administrative fee, they have to charge that administrative fee to all their customers at the same price,” said Jetton.

Back to the second part of Meyer’s question. “How much is being sent to the state, if any?”

The paperwork shows how much each dealership has put into the fund. For example, some top contributors in the Ozarks last year, Corwin Motors $178,000. Reliable Chevrolet $140,000. Thompson Sales $98,000 and Youngblood $91,000.

It also shows only 907 of the 4,917 dealers in the Show-Me state collect an administrative fee.

Ashley Reynolds asked Jetton, “Why do dealers get to choose to participate if we’re all going to end up benefiting from this system?”

“In dealers that don’t charge that, you could say we’re getting a better deal, but that’s the way the legislature wrote it. The big dilemma is between may and shall. Instead of having the shall word, it had the may, and the dealers were able to choose whether they had the fee or not,” said Jetton.

“I think it’s up to the individual dealers and dealerships to decide how much they would charge and if they charge at all,” said Hough.

Those 907 dealerships that have the administrative fee are putting about $1.5 million a month into this fund.

“I’m happy to hear they’re turning over the fee they’re supposed to,” said Meyer.

In that records request, On Your Side asked to see the total budget for the fund. Documents show by 2031, this is a more than $82 million projected program. By July 2037, the price tag is nearly $108 million.

“It takes time to build a giant IT system like this. I think, in the end, it will be a better system for the public,” said Hough.

Jetton says the state went with the lowest of four bids. A company called Fast Enterprises in Colorado will do the job. He says they’ve moved about thirty employees to Jefferson City.

“Their bid came in at $65 million. The next closest bid was $104 million. They were about $40 million cheaper than everyone else, and they got a reputation of being the top modernization company in the nation. I think we’re the 17th state they’re doing,” said Jetton.

Reynolds asked if Missouri’s budget is comparable to other states with similar programs.

“From what we’ve researched and seen, yes. As a matter of fact, it’s gotten cheaper,” said Jetton.

$278 is the monthly cost of two leased printers.

“That’s why we are going to a service contract. We have so much trouble keeping printers operational. They do a heavy volume at the license offices. They break. They go down. We think it will save us money if we go with a contract,” said Jetton.

“We could go to Office Depot right now and find cheaper printers or a bulk order at Best Buy,” said Meyer.

DOR says the computers won’t be ready for another three years.

“I got a strange feeling that’s going to be a shorter deadline than they’re going to be able to meet,” said Widiger.

Dealerships will still be paying until the system is ready to go.

“I would like them to get the computer system set up and get it done. We are sending them a lot of money every month,” said Widiger.

When the switch happens, that 10 percent the state collects from dealerships will drop to one percent.

“We are hoping the other nine percent will help cover the additional staff needed,” said Widiger.

Meyer might not agree with the cost, but we did track down where our money goes.

“I don’t think we’re getting much bang for our buck,” he said.

The Department of Revenue initially declined our interview request. For about a month, we kept asking. The director of strategy and communications repeatedly wanted us to send questions beforehand. KY3 News does not do that. We told Governor Parson and State Senator Hough about this problem, and eventually, we got that sit-down interview.

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