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SC Supreme Court Upholds Verdict Against Car Dealership for Charging Illegal Closing Fees

On November 4, 2015, the South Carolina Supreme Court ruled in favor of 5,315 car buyers in their lawsuit against a Pickens County car dealership for charging improper closing fees.  In their lawsuit, the buyers sought damages under the South Carolina Dealers Act on the ground that the dealership “unfairly” and “arbitrarily” charged all of its customers “closing fees” that were not calculated to reimburse the dealership for actual closing costs.  The closing fees ranged from $249 to $399 per car, and the dealership failed to present evidence that it calculated the actual costs before charging the closing fee.

At trial, a jury returned a verdict in favor of the car buyers in the amount of $1,445,786.00 actual damages and the car dealership appealed that decision.  According to the State Newspaper this lawsuit is one of many lawsuits brought against car dealerships in South Carolina.  Some cases have settled, but many were waiting on the Court’s decision in this case.

In affirming the jury’s verdict against the car dealership, a majority of the South Carolina Supreme Court found that “any costs sought to be recovered by a dealer under a closing fee charge must be directly related to the services rendered and expenses incurred in closing the purchase of a vehicle.”  The Court also held, “As a result, a dealer may comply with the statute by setting a closing fee in an amount that is an average of the costs actually incurred in all closings of the prior year.”

This decision is of great importance because many South Carolinians could have been unfairly and arbitrarily charged a closing fee and should be compensated for their loss.

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