Minnesota's Junk Fee Law Exempts Fees, Not Car Dealers — and the Doc Fee Cap Is the Lesser of $350 or Ten Percent

Read the buyer’s order on a Minnesota car deal one line at a time. Whether a line you never saw in the advertised price was allowed to stay out of it turns on which statute authorizes that fee. It doesn’t turn on the fact that a dealer charged it.

The shorthand I keep running into on Minnesota’s price-transparency law is that car dealers are out of it. That isn’t what the statute says, and the difference decides line items.

Minn. Stat. § 325D.44, subd. 1b, takes three things out of the all-in pricing rule. Here’s the first:

(1) fees authorized by law related to the purchase or lease of a motor vehicle that are charged by a motor vehicle dealer, as defined by section 168.27, subdivision 1, paragraph (f);

Read the grammar. The exempt thing is a fee, not a seller. The fee has to meet three conditions at once: it must be authorized by law, it must be related to the purchase or lease of a motor vehicle, and it must be charged by a motor vehicle dealer as the cross-reference defines that term. A dealer’s whole price disclaimer doesn’t ride through this clause just because the dealer is a dealer. Each line on it rides through on its own, or it doesn’t get through at all.

So the only question that matters here is this one: what does Minnesota law actually authorize a dealer to charge?

It’s a short list. And the fee at the center of it hasn’t been a flat dollar amount since July 1, 2023.

The doc fee cap has a ratio in it, and the ratio is three years old

Minn. Stat. § 168.27, subd. 31, is captioned “Documentary fee.” Paragraph (a) sets the terms:

(a) A motor vehicle dealer may not charge a documentary fee or document administration fee in excess of the amounts provided under paragraph (b) for services actually rendered to, for, or on behalf of the retail buyer or lessee to prepare, handle, and process documents for the closing of a motor vehicle retail sale or lease of a vehicle being registered in the state of Minnesota. The fee must be separately stated on the sales agreement maintained under Minnesota Rules, part 7400.5200, and may be excluded from the dealer’s advertised price.

Paragraph (b) supplies the amounts. It does it in three tiers, each built the same way:

(b) For motor vehicle sales or leases made on or after July 1, 2023, through June 30, 2024, the maximum fee is the lesser of $200 or an amount equal to ten percent of the value of the sale or lease. For motor vehicle sales or leases made on or after July 1, 2024, through June 30, 2025, the maximum fee is the lesser of $275 or an amount equal to ten percent of the value of the sale or lease. For motor vehicle sales or leases made on or after July 1, 2025, the maximum fee is the lesser of $350 or an amount equal to ten percent of the value of the sale or lease.

Three ceilings, one formula. The number that controls is whichever is smaller: the dollar figure or ten percent of the deal.

That structure came in with 2023 Minn. Laws ch. 68 (H.F. No. 2887), art. 4, § 40, which rewrote subdivision 31 and carried its own effective-date clause: “This section is effective for motor vehicle sales and leases made on or after July 1, 2023.”

The session law also shows what it replaced. The old text set a flat maximum of $100 for sales made on or after July 1, 2017 through June 30, 2020, and a flat $125 for sales on or after July 1, 2020. No percentage, no proportionality, no floor. The 2023 act struck both figures and put in the “lesser of” formula, and in the same stroke added the words “of a vehicle being registered in the state of Minnesota” to paragraph (a).

So the ratio isn’t a 2025 development. It’s governed every Minnesota retail motor vehicle sale and lease since July 1, 2023 — eighteen months before § 325D.44, subd. 1a, took effect on January 1, 2025.

Do the arithmetic and the exemption grows a price floor

A percentage cap and a dollar cap cross at one point: where ten percent of the sale equals the dollar figure.

Under the current tier, ten percent of the value equals $350 when the value is $3,500, because $3,500 multiplied by 0.10 is $350. Above $3,500 the dollar figure is the smaller number, and the cap is $350. Below $3,500 the percentage is the smaller number, and the cap is ten percent of that particular deal.

Run the same math on the middle tier and you get $2,750, because $2,750 multiplied by 0.10 is $275. The first tier gives you $2,000, because $2,000 multiplied by 0.10 is $200.

Now put it on a buyer’s order. Here’s an invented example that describes no actual dealer or listing: a used car offered at $2,995, with a flat $350 documentary fee added at signing and kept out of the offered price. Ten percent of $2,995 is $299.50. That’s the most the statute permits as a documentary fee on that sale. The $350 charge is over it by $50.50. On an $1,800 unit the cap is $180 and the same flat charge is over it by $170.

That overage is worth more than its dollar value. Subdivision 1b(1) exempts fees authorized by law. A documentary fee bigger than subdivision 31(b) permits is, by the plain text of subdivision 31(a), a fee the dealer “may not charge”. It isn’t authorized by law. So it never gets into the exemption, and the ordinary rule in § 325D.44, subd. 1a(a), applies to it: an advertised, displayed, or offered price that doesn’t include all mandatory fees or surcharges is a deceptive trade practice. The excluded fee has to be in the advertised number.

As I read it, one flat-rate disclaimer produces two separate problems on the same car: a charge above the statutory maximum, and an advertised price missing a fee that no longer qualifies for the exemption. A dealer who advertises a flat fee on a lot with sub-$3,500 inventory has written the arithmetic into its own disclaimer.

This bites hardest at the bottom of the market. Older trade-ins, buy-here-pay-here inventory, the cheapest rows on a franchise dealer’s used lot. Those buyers are the least able to absorb a $350 charge, and they’re the ones the ratio was built to protect.

The permission to keep the fee out of the price isn’t in the junk fee law at all

This is the part practitioners skip. Subdivision 1b(1) doesn’t itself authorize anybody to advertise a price without the doc fee in it. It exempts fees that some other law authorizes. That other law is the last clause of § 168.27, subd. 31(a): the fee “may be excluded from the dealer’s advertised price.”

That’s the permission that actually does the work, and it comes with strings attached in the same paragraph:

• The fee must be for services actually rendered “to prepare, handle, and process documents for the closing”. A charge collected where no closing documents were prepared is not the fee the statute describes.
• The transaction must be the sale or lease “of a vehicle being registered in the state of Minnesota”.
• The fee “must be separately stated on the sales agreement maintained under Minnesota Rules, part 7400.5200”.
• And it must sit at or under the paragraph (b) cap.

Read Minn. R. 7400.5200 alongside the statute, because it hands the buyer the proof. Subpart 2 provides that the sales agreement “must be maintained and made available for the registrar’s inspection for three years after the sale of the vehicle”, and item E requires it to contain “an itemized list of all fees and taxes collected in connection with the vehicle transaction”. The buyer’s order is itemized by rule and kept by rule for three years. A fight over what was charged and what it was called can be answered from a document the dealer already has to keep.

The other authorized fee has “optional” in its statutory name

Subdivision 31(c) carves one thing out of the documentary fee:

(c) “Documentary fee” and “document administration fee” do not include an optional electronic transfer fee as defined under section 53C.01, subdivision 14.

Follow the cross-reference and the definition turns out to be unusually demanding:

“Optional electronic transfer fee” means a charge for services agreed upon between the parties for electronic transmission of ownership records. The charge must be separately stated and identified as “optional electronic transfer fee” on the sales agreement maintained under Minnesota Rules, part 7400.5200. At least half of the fee must be paid to an electronic transmission service provider.

Three elements, and you can check every one against the buyer’s order: the charge is agreed upon between the parties, it’s separately stated and identified by that exact phrase, and at least half of it goes to an electronic transmission service provider. The label isn’t decoration. The statute prescribes the words.

And the first word does the heavy lifting. A fee that’s genuinely optional isn’t a “mandatory fee” under § 325D.44, subd. 1a(b), on any of its three prongs, so the junk fee law never had a quarrel with it. A fee the buyer can’t decline isn’t an optional electronic transfer fee. That means it isn’t the thing § 53C.01, subd. 14, defines, so it isn’t authorized by that section, so subdivision 1b(1) doesn’t reach it — and subdivision 1a does. The statute is built so the charge is either harmless or unexempt. There’s no third setting.

Past those two, the charges that comfortably meet “authorized by law” are the ones the state itself sets and the dealer just collects. Minn. Stat. § 168.33, subd. 7(a), imposes “an $8 filing fee … on every vehicle registration renewal, excluding pro rate transactions” and “a $12 filing fee … on every other type of vehicle transaction”. Minn. Stat. § 168A.29, subd. 1(a)(1), covers “filing an application for and the issuance of an original certificate of title, $8.25”, with “a surcharge of $2.25 … added to the fee”, and subdivision 1(b) adds that “the department must be paid $3.50” on top of it — $8.25 plus $2.25 plus $3.50, or $14.00 in all for an original title.

Those are creatures of statute down to the quarter. I read the exemption as existing in large part so a dealer’s advertised price doesn’t have to soak up charges that vary with each buyer’s registration situation.

Which dealer charges have no statute behind them?

Dealer preparation. Reconditioning. Nitrogen in the tires. VIN etching. Paint and fabric protection. Theft-deterrent registration. Market adjustment. A destination or freight charge re-added at retail after it was already in the manufacturer’s price.

I went looking for a Minnesota statute that authorizes any of those by name and found none. That’s a negative, so here’s how I ran it: I pulled § 168.27 in full to its History line and read every subdivision caption; I read § 325D.43 in full, which is the definitional section for §§ 325D.43 to 325D.48 and defines seven terms, all of them trademark concepts; and I followed each cross-reference the fee provisions make — to § 168.002, to § 53C.01, and to Minn. R. 7400.5200. None of them names a preparation, reconditioning, protection, or adjustment charge.

A charge with no authorizing statute isn’t “authorized by law”, so the exemption isn’t available to it, and it’s measured by subdivision 1a(b) like any other fee. That test is disjunctive: a mandatory fee includes one that “must be paid in order to purchase the goods or services being advertised”, or that “is not reasonably avoidable by the consumer”, or that “a reasonable person would expect to be included in the purchase of the goods or services being advertised”. A line item printed on every buyer’s order, with no box to decline it, answers the first two on its face.

I want to emphasize where that leaves the exemption. It’s real, it does genuine work, and it’s narrow. It covers the doc fee within its cap, the optional electronic transfer fee when it’s actually optional and actually labeled, and the government charges the state fixes. It doesn’t cover the rest of the disclaimer.

The cross-reference points at a paragraph that defines a different word

Somebody will raise this drafting wrinkle, so take it head on.

Subdivision 1b(1) borrows its class from “section 168.27, subdivision 1, paragraph (f)”. Paragraph (f) reads:

(f) “Dealer” includes licensed new motor vehicle dealers, used motor vehicle dealers, motor vehicle brokers, wholesalers, auctioneers, lessors of new or used motor vehicles, scrap metal processors, used vehicle parts dealers, and salvage pools.

Subdivision 1(a) frames the whole list: “For the purposes of this section, the terms in paragraphs (b) to (o) have the meanings given them”.

Paragraph (f) defines “Dealer”. The junk fee exemption uses the term “motor vehicle dealer”. Those aren’t the same word, and paragraph (f)’s list sweeps in businesses that don’t retail motor vehicles at all — scrap metal processors, used vehicle parts dealers, salvage pools. That leaves two readings: the exemption reaches the enumerated categories, or the cross-reference misfires and leaves the exempt class undefined. I haven’t found a Minnesota decision choosing between them. Neither reading stretches the exemption past fees authorized by law, and that’s the condition that actually controls.

Is a boat a “motor vehicle”? No — but the trailer under it is

Chapter 325D never defines “motor vehicle”. Section 325D.43 defines seven terms, and that isn’t one of them. The definition that governs the section the exemption points into is § 168.27, subd. 1(j):

(j) “Motor vehicle” has the meaning given it in section 168.002, subdivision 18, and also includes a park trailer as defined in section 168.002, subdivision 23.

Section 168.002, subd. 18(a), then supplies the core:

(a) “Motor vehicle” means any self-propelled vehicle designed and originally manufactured to operate primarily on highways, and not operated exclusively upon railroad tracks. It includes any vehicle propelled or drawn by a self-propelled vehicle and includes vehicles known as trackless trolleys that are propelled by electric power obtained from overhead trolley wires but not operated upon rails.

Two clauses, pulling in opposite directions. The first shuts out anything not built primarily for the highway. The second sweeps in anything towed.

Paragraph (d) then removes several things by name:

(d) “Motor vehicle” does not include a snowmobile; a manufactured home; a park trailer; an electric personal assistive mobility device as defined in section 169.011, subdivision 26; a motorized foot scooter as defined in section 169.011, subdivision 46; or an electric-assisted bicycle as defined in section 169.011, subdivision 27.

Paragraph (c) removes all-terrain vehicles except in two narrow cases — one owned and operated by a physically disabled person and displaying disability plates under paragraph (b), or one “licensed as a motor vehicle before August 1, 1985”.

Now sort the showroom against that text. A car, truck, van, motorcycle, or motorhome is a motor vehicle. A travel trailer, boat trailer, utility trailer, or horse trailer is a motor vehicle, because subdivision 18(a) reaches a vehicle “drawn by a self-propelled vehicle”. A park trailer is excluded by subdivision 18(d) but added back for § 168.27 purposes by that section’s subdivision 1(j). A snowmobile is excluded by name. An all-terrain vehicle is excluded except for the two exceptions. A boat or personal watercraft isn’t “designed and originally manufactured to operate primarily on highways”, and nothing in subdivision 18 brings it back.

The industry won’t like where that lands, and it comes straight from the text: on a single invoice for a boat-and-trailer package, the trailer is a motor vehicle and the boat isn’t.

The exemption in subdivision 1b(1) is keyed to “the purchase or lease of a motor vehicle”. Where the unit isn’t a motor vehicle, the exemption has nothing to attach to.

The documentary fee authorization runs out at the same edge, and for a second reason. Section 168.27, subd. 31(a), speaks to “the closing of a motor vehicle retail sale or lease of a vehicle being registered in the state of Minnesota”. A sale of something that isn’t a motor vehicle isn’t a motor vehicle retail sale, so subdivision 31 neither caps nor authorizes a documentary fee on it — and the permission to exclude the fee “from the dealer’s advertised price” is part of the same paragraph.

The federal rule that would have covered this is gone

If you’ve researched dealer add-ons in the last two years, you’ve run into the FTC’s Combating Auto Retail Scams Rule, published at 89 Fed. Reg. 590 (Jan. 4, 2024) and codified at 16 C.F.R. pt. 463. As the Commission itself later summarized it, the rule “required accurate pricing disclosures in dealers’ advertising and sales communications”, “required dealers to obtain consumers’ express, informed consent for charges”, and “prohibited the sale of any add-on product or service that confers no benefit to the consumer”.

It isn’t law. The National Automobile Dealers Association and the Texas Automobile Dealers Association petitioned for review, and on January 27, 2025 the Fifth Circuit held for them on procedure: “The FTC violated its own regulations when it failed to issue an ANPRM for the CARS Rule”. Nat’l Auto. Dealers Ass’n v. FTC, No. 24-60013, slip op. at 14 (5th Cir. Jan. 27, 2025). The court rejected the Commission’s harmless-error argument — “This was not harmless error”, slip op. at 18 — granted the petition, and vacated the rule. Judge Higginson dissented, writing that it was “regrettable that our court still sets aside the CARS Rule”, a rule addressing dealer practices “which inflict immense, proven harm on U.S. consumers”. Slip op. at 21 (Higginson, J., dissenting).

The Commission then conformed the Code. In a final rule published at 91 Fed. Reg. 6507 (Feb. 12, 2026) and effective that day, it stated: “This final rule withdraws the CARS Rule published at 89 FR 590 (Jan. 4, 2024) and delayed at 89 FR 13267 (Feb. 22, 2024) to conform the rule with the Fifth Circuit’s decision”. I checked the result instead of assuming it: in the eCFR’s title 16 as issued August 31, 2026, part 463 is gone, while part 464 — the FTC’s separate fee rule — is there. Part 464 doesn’t fill the gap. Section 464.1 defines the rule’s reach as “(1) Live-event tickets; or (2) Short-term lodging, including temporary sleeping accommodations at a hotel, motel, inn, short-term rental, vacation rental, or other place of lodging”. A car is neither.

So there’s no federal pricing rule for motor vehicle dealers. The all-in pricing protection a Minnesota car buyer has against an unauthorized add-on comes from Minnesota statutes, and that’s a big part of why the narrow reading of subdivision 1b(1) matters.

Has a Minnesota court decided any of this?

Not that I can find. A negative is worth nothing without its method, so here’s how hard I looked.

I ran the question five ways — by statutory citation (§ 168.27, subd. 31 and § 325D.44, subds. 1a and 1b), by the doctrinal phrase a court would write (mandatory fees or surcharges; fees authorized by law), by the trade term (doc fee; documentary fee), by the subject (price transparency and junk fee, together with advertised price), and by the archive path where the Minnesota Judicial Branch publishes its slip opinions. None of them turned up a Minnesota appellate decision construing either provision.

The Judicial Branch’s own search interface wouldn’t answer a script — it returns a 302 challenge — so I confirmed the retrieval path separately by pulling a published Court of Appeals slip opinion from the archive directly and reading its caption and docket number. The path works. There’s just nothing there on these sections yet.

Treat that for what it is. The provisions are new, appellate silence is expected, and a district court could construe any of this tomorrow.

What should a buyer keep?

The listing, captured before the conversation starts. The violation in § 325D.44, subd. 1a(a), is defined by what was advertised, displayed, or offered. A screenshot of the vehicle detail page with its disclaimer is the evidence. The window sticker isn’t a substitute.

The buyer’s order. Minn. R. 7400.5200, subp. 2, requires it to itemize every fee and tax and requires the dealer to keep it for three years. Every question in this article — what the fee was called, what it was, whether it was separately stated — gets answered on that page.

The date of sale. It picks the tier. A sale closed in May 2025 is measured against the lesser of $275 or ten percent; one closed in August 2025 against the lesser of $350 or ten percent.

The sale price used for the calculation. Ten percent of what is the live question on a deal with a trade-in, rebates, or a negative-equity rollover, and the answer decides whether a flat fee cleared the cap.

If something went wrong after the sale instead of at it, different statutes take over — the used-car warranty at Minn. Stat. § 325F.662 and the Truth in Repairs Act for the service department.

Most dealer paperwork also carries an arbitration clause, and what that does to a consumer claim is its own subject, covered in our piece on the Federal Arbitration Act and consumer contracts. For smaller overcharges, conciliation court is often the right-sized forum. And the structural question — which Minnesota statute supplies a damages remedy for a pricing violation in the first place — is worked through in our article on where the junk fee law sits in the Deceptive Trade Practices Act.

One last note, on the Attorney General’s published guidance. The office’s Price Transparency Law FAQ, revised April 2025, lists the exemptions and gives the first one by quoting it — “fees authorized by law related to the purchase or lease of a motor vehicle that are charged by a motor vehicle dealer”. The quotation marks are the office’s own. The guidance describes a fee category, not an industry. That’s exactly what the statute does.

Madgett Law, LLC

Madgett Law, LLC represents Minnesota consumers in deceptive pricing, consumer fraud, landlord-tenant, debt collection, and credit reporting matters, in state and federal court. If a charge showed up on your purchase that wasn’t in the price you were shown, we can tell you whether a statute reaches it and what the documents you already have can show. Call 612-470-6529 or send us a message.

Sources: Minn. Stat. § 325D.44, subd. 1a(a) (advertised, displayed, or offered price must include all mandatory fees or surcharges) and subd. 1a(b) (three-prong “mandatory fee” definition), subd. 1b(1) (exemption for fees authorized by law related to the purchase or lease of a motor vehicle charged by a motor vehicle dealer); Minn. Stat. § 325D.43, subds. 1–8 (definitions for §§ 325D.43 to 325D.48; no definition of “motor vehicle”); Minn. Stat. § 168.27, subd. 1(a) (definitions apply “[f]or the purposes of this section”), subd. 1(f) (definition of “Dealer”), subd. 1(j) (“motor vehicle” takes the § 168.002, subd. 18 meaning and adds a park trailer), subd. 31(a) (documentary fee; services actually rendered; vehicle being registered in Minnesota; separate statement on the Minn. R. 7400.5200 sales agreement; exclusion from the advertised price), subd. 31(b) (three tiers, each the lesser of a dollar figure or ten percent of the value of the sale or lease), subd. 31(c) (optional electronic transfer fee excluded from the defined terms); 2023 Minn. Laws ch. 68 (H.F. No. 2887), art. 4, § 40 (rewriting § 168.27, subd. 31; striking the prior flat $100 and $125 maximums; adding “of a vehicle being registered in the state of Minnesota”; effective for motor vehicle sales and leases made on or after July 1, 2023); Minn. Stat. § 53C.01, subd. 14 (definition of “optional electronic transfer fee”; required label; at least half paid to an electronic transmission service provider); Minn. Stat. § 168.002, subd. 18(a) (definition of “motor vehicle”; highway-primary design; vehicles drawn by a self-propelled vehicle), subd. 18(b)–(c) (all-terrain vehicle exclusion and its two exceptions), subd. 18(d) (exclusion of snowmobiles, manufactured homes, park trailers, and others), subd. 23 (park trailer); Minn. Stat. § 168.33, subd. 7(a)(1)–(2) ($8 and $12 filing fees); Minn. Stat. § 168A.29, subd. 1(a)(1) ($8.25 original title fee and $2.25 surcharge) and subd. 1(b) (additional $3.50); Minn. R. 7400.5200, subp. 1 (documentation on file) and subp. 2, items A–G (sales agreement contents, including item E’s itemized list of all fees and taxes; three-year retention for the registrar’s inspection); Minnesota Attorney General, Price Transparency Law FAQ (rev. 4/2025), p. 2 (exemptions, quoted); Combating Auto Retail Scams Trade Regulation Rule, 89 Fed. Reg. 590 (Jan. 4, 2024), and delay of effective date, 89 Fed. Reg. 13267 (Feb. 22, 2024); National Automobile Dealers Ass’n v. FTC, No. 24-60013, slip op. at 14, 18 (5th Cir. Jan. 27, 2025) (FTC violated its own regulations by failing to issue an ANPRM; error not harmless; petition granted and rule vacated), and id. at 21 (Higginson, J., dissenting); Revision of the Negative Option Rule, Withdrawal of the CARS Rule, Removal of the Non-Compete Rule To Conform These Rules to Federal Court Decisions, 91 Fed. Reg. 6507 (Feb. 12, 2026) (CARS Rule withdrawn, effective February 12, 2026; summary of what the CARS Rule had required); 16 C.F.R. § 464.1 (“covered good or service” limited to live-event tickets and short-term lodging), as issued August 31, 2026; eCFR title 16 structure as issued August 31, 2026 (part 463 absent; part 464 present). This article is general legal information about Minnesota law. It is not legal advice, it does not create an attorney–client relationship, and no particular outcome is promised or implied.