Can Tow Companies Legally Charge Exorbitant Fees to Store Vehicles for Auction?

Introduction

The legality of tow companies charging fees for storing vehicles before auctioning them off can vary based on local laws and regulations. Understanding the legal framework surrounding these practices is crucial for vehicle owners and consumers. This article delves into the complexities of these fees and the rights of consumers.

Local Regulations

Many jurisdictions have specific laws that govern towing and storage fees. These laws often dictate how much a tow company can charge for towing and daily storage fees. For instance, in Jurisdiction X, the maximum daily storage fee is set at $10, while in Jurisdiction Y, it is capped at $15. It is essential to familiarize oneself with these local regulations to understand the limitations and guidelines placed on tow companies.

Contractual Agreements

It is important to review any signs or contracts that may outline the terms and conditions of towing and storage fees. If the vehicle was towed from private property, the owner may have agreed to specific terms. For example, a tow company may state that they charge a $50 towing fee and $20 per day for storage. Understanding these agreements can help safeguard your rights.

Reasonableness of Fees

In some jurisdictions, storage fees must be reasonable and not excessively high. What may be considered "excessive" can vary, but generally, fees that exceed reasonable maintenance costs may be questionable. For instance, if a tow company charges $500 for storage when the cost to maintain the facility is around $100, it may be deemed unreasonable.

Notification and Auction Process

Tow companies typically must follow a legal process for notifying vehicle owners and for auctioning off vehicles. This process often includes waiting a certain period before auctioning and notifying the owner of the accrued fees. For example, in Jurisdiction Z, a vehicle must be held for at least 30 days before it can be auctioned. During this period, the tow company must provide the owner with clear and timely notifications of any fees that have accrued.

Consumer Protection Laws

Consumer protection laws provide additional safeguards against unfair or deceptive practices in the towing and storage industry. These laws may offer recourse for consumers who feel their rights have been violated. For instance, in Jurisdiction W, a consumer can file a complaint with the local consumer protection agency if they believe the fees charged were unfair or deceptive.

If you believe the fees charged by a tow company are excessive or unfair, it may be worthwhile to consult with a local attorney or contact a consumer protection agency for guidance specific to your situation and location.

For whatever reason a vehicle was impounded, whether it was your fault or not, wrecker yards have expenses associated with storing the car securely. Once you look at what it costs to house the car until the auction, you will soon realize those “outrageous fees” aren’t so outrageous after all.

Tow companies must follow a statutory minimum holding period before auctioning a vehicle. They are allowed to charge whatever fees they see necessary to maintain the storage facility and to cover any expenses incurred while dealing with a given car. These fees also guarantee that the tow company can provide a proper title when the car is auctioned, as they will obtain a sheriff's title prior to sending the car to auction. If the car was financed, the finance company will typically be notified of the car's whereabouts and given the opportunity to recover it.

All too often, the finance company will simply send the storage yard the title and attempt to recover what is still owed on the car from the owner.