RVDA’s Ingrassia calls FTC’s proposed rule a ‘step backwards’ – RVBusiness
EDITOR’S NOTE: The following was written by Phil Ingrassia, President of the RV Dealers Association (RVDA), as part of his report to the recent meeting of the RVDA Board of Directors.
The Federal Trade Commission (FTC) is proposing new regulations that could have a major impact on the motor vehicle financing and sales process and require extensive disclosure about optional products typically sold in the F&I office.
The agency is also considering requiring dealers to provide an “offer price” for any specific vehicle they advertise. Some in the industry have called it the “out the door” price the dealership would charge to purchase the vehicle, excluding taxes and government fees.
The RVDA is conducting a thorough review of the proposed rule and, on its face, the FTC’s initial draft rule would impose redundant and ineffective requirements that will hurt buyers by raising prices, extending sales transaction times, requiring additional documents and signatures and making the customer experience more confusing. Ironically, the FTC complains that the current amount of paperwork confuses the customer.
The proposed rule is extremely broad and clearly includes recreational vehicles as well as all types of other vehicles. In the rule, motor vehicles are defined as: any motor vehicle designed for the transport of persons or goods on a street, highway or other road; pleasure boats and marine equipment; motorcycles; motor homes, recreational vehicle trailers and slide-out motor homes, and other vehicles registered and sold through dealerships.
No one tolerates misleading advertising or unfair practices in the sales or financing process. However, the FTC already has the power to crack down on deceptive marketing practices and has used these regulations to prosecute dealers who don’t follow existing rules.
A step back
At a time when the industry is striving to simplify vehicle sales and pricing, streamline transactions, and improve the customer experience, this type of rule goes in the opposite direction. It focuses too much on a vehicle sales model of the past and does not consider distance selling scenarios and future industry developments.
The FTC seems to be proposing a broad new regulatory framework without any detailed analysis of the extent of the so-called “junk fee” problem and simply relying on anecdotal stories if something has gone wrong in a sale transaction of vehicles. It’s the equivalent of trying to use a cannon to kill a fly.
The RVDA will work with its members and industry allies to provide detailed comments to the FTC on this flawed proposal and minimize its impact on consumers, dealers and the entire RV industry.
Thanks for your help!