If you’ve financed your solar panel system, you might have unknowingly paid a dealer fee. This hidden charge can cost you thousands of dollars. But what exactly is a dealer fee, and why is it important in the context of solar panel lawsuits?
Understanding the Dealer Fee in Solar Loans
A dealer fee (sometimes called a “program fee”) is an extra charge that lenders impose when financing solar panels. While many homeowners believe they’re only paying for the solar system itself, this hidden fee inflates the total cost of the loan. Unfortunately, it often happens without the borrower’s full understanding.
Lenders claim this fee covers the cost of offering “special financing programs.” In reality, this fee is a kickback to the solar company for bringing them new customers. This practice is widespread in the industry and can significantly increase your loan amount without you realizing it.
How the Dealer Fee Works
- Solar companies set up financing deals with lenders who offer loans to homeowners.
- The lender adds a dealer fee—usually 10% to 30% of the total loan amount. This gets paid directly to the solar company.
- The homeowner ends up borrowing more than they expected because the dealer fee is rolled into the total loan balance.
For example, if your solar system was priced at $30,000 and the dealer fee was 20%, you wouldn’t just be financing $30,000—you’d actually be financing $36,000 ($30,000 + $6,000 dealer fee). This means you’re paying interest on money that never actually went toward your solar panels.
Why Is the Dealer Fee a Problem?
Many homeowners don’t realize they’ve been charged a dealer fee because it’s not clearly disclosed in their loan documents. Some key issues with dealer fees include:
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- Hidden Costs – Lenders often bury dealer fees deep in contracts, making them hard to spot.
- Inflated Loan Balances – You might be financing thousands of dollars more than the actual price of your solar system.
- Higher Interest Payments – Since the dealer fee is part of the loan, you end up paying interest on that extra amount.
- Potential Legal Violations – In some cases, lenders fail to properly disclose dealer fees, which could be a violation of consumer protection laws.
Are Lenders Liable for Dealer Fees?
Lenders often try to avoid liability by claiming they were just financing the transaction, but under the Federal Trade Commission (FTC) Holder Rule, they may be responsible for deceptive practices by the solar company.
This means that if your solar installer misrepresented the cost of your system or failed to disclose the dealer fee, the lender could be held accountable.
What Can You Do if You Were Charged a Dealer Fee?
If you suspect you were charged a dealer fee without full disclosure, here’s what you can do:
- Review Your Loan Documents – Look for terms like “dealer fee,” “program fee,” or “loan origination fee.”
- Request a Loan Breakdown – Ask your lender for a detailed statement of all charges.
- Consult a Consumer Attorney – A lawyer specializing in solar panel lawsuits can help determine if you have a case against your lender.
Final Thoughts
Dealer fees are one of the most common hidden costs in solar financing, and many homeowners are completely unaware they’ve paid thousands more than necessary. If you financed your solar panels and suspect a dealer fee was added without clear disclosure, you may have legal options to fight back.
If you have questions about your solar loan or potential legal claims, contact us today for a free consultation. You shouldn’t have to pay for a system that was misrepresented to you.
