RVDA submitted a 13-page comment letter to the Federal Trade Commission (FTC) on its proposed Motor Vehicle Dealers Trade Regulation Rule. In the letter, RVDA made two primary objections.
First, RVDA argued RV industry practices differed enough from automotive industry practices the proposed rule tries to capture that the RV industry should not be subject to the rule.
Second, implementing compliance with the proposed rule would create “extensive” and “massive” business operations changes that could put small RV dealers out of business.
The first half of the comment letter discusses the differences between automotive and RV dealers and why RV dealers should not be captured within the proposed rule.
“RVDA is concerned that this proposal is targeted at business practices for automobile dealers who sell motor vehicles,” RVDA said, “However, it sweeps in RV dealers and other types of dealers that have different business models, customers, vehicle customization and business practices.”
Among the differences cited are RVs being discretionary purchases, not used daily like cars and the RV market being much smaller than the automotive market.
The comment letter argued the proposed rule exceeded statutory authority and assumed flawed reasoning in its cost analysis.
Additionally, RVDA said the FTC did not consider the RV industry and its practices when forming the proposal.
“RVDA is concerned that the FTC did not do any due diligence into the RV sales process and simply relied on available data on the automobile sales process,” RVDA said. “Yes, there are similarities between motor vehicle sales, but there are also fundamental differences that place a larger and more challenging burden on RV dealers.”
Among the differences RVDA cited is the preparation necessary to deliver an RV to a consumer.
“If you had investigated the RV industry, you would have learned that RV sales are different from automobile sales since RV sales are based on adding certain add-ons to the vehicle so it can be used by the customer,” RVDA said. “Without a few key add-ons to the RV, it would be unusable by the consumer.”
RVDA also detailed areas within the proposal foreign to RV transactions, such as leases and captive financing.
The second half of the letter discussed disclosure requirements, add-on products and recordkeeping.
RVDA said proposed rules regarding offering price disclosure were unworkable in current RV business sales models because RV salespeople want to have a conversation/interview with a consumer about intended use before quoting an offering price.
“An RV dealer should be able to quote an offering price to the customer based on a conversation with the customer about their intended use of the RV and how it will be towed,” RVDA said. “Otherwise, if an RV dealer provides an offering price without a conversation, the customer will become frustrated that necessary add-ons, such as batteries and hitch work, can add thousands of dollars to the offering price – and isn’t that what this rule is intended to avoid?”
Freight charges also vary in the RV industry, unlike most automotive deliveries. Requiring an offering price to be disclosed without consideration of a consumer’s location could harm dealers located further from a manufacturer and brick-and-mortar stores competing with online dealers.
RVDA objected to the FTC’s characterization of add-on products as “junk fees.” The comment letter said not all add-ons are questionable and many are necessary in the RV industry.
“Imagine an RV dealer selling a travel trailer to a customer, but not including the hitch work to tow the vehicle in the sale,” RVDA said. “Think about boat dealers who literally purchase a hull from a marine manufacturer, and it is the dealer who installs the boat engines (many manufacturers and price points), radars and GPS devices. Are boats and RVs offering prices to exclude hitches and engines, costing thousands to be excluded from the offering price since they are unknown variables?”
RVDA listed add-ons typically found on RVs, including extended service contracts, hitch work, pre-delivery inspection fees, exterior/interior surface treatments, travel trailer batteries and a second air conditioner.
“It appears that the FTC may limit an RV dealer from creating a unique package of add-ons to an RV to sell to its customers,” RVDA said. “When selling a vehicle to a customer, the (proposed rule) seems to indicate that an RV dealer must disclose the cash price of a vehicle without the ‘add-ons,’ and the dealer must advise the customer that the vehicle can be purchased for the cash price.”
RVDA cited packages to add TVs, awnings and sound systems to RVs for tailgating consumers; off-grid packages featuring solar panels, larger batteries and extra water holding tanks; and sturdier packages created for extended-stay/full-time RVers.
“Please clarify that the RV dealer will not need to obtain a consumer’s express informed written consent before installing special package options tailored to its local market,” RVDA said. “Please clarify how an RV dealer will be able to sell and document these types of transactions without the dealer requiring the consumer to sign a separate disclosure documenting ‘Express, Informed Consent’ for every single dealer-installed item.”
The comment letter also addressed recordkeeping requirements in the proposed rule, citing the small nature of many RV dealerships. Generally, dealers would be required to retain all communication from completed or abandoned transactions for two years.
“One-third of RV dealers have five employees or less. There are so many modern platforms through which a consumer and an RV salesman may communicate that this is an unrealistic burden for small businesses,” RVDA said. “Communications may be through the website, social media, (or) a cell phone application. It could involve a salesman texting with a work phone (or) texting with (a) personal phone. It can involve phone calls and other devices not controlled by the RV dealership. This is such an incredible recordkeeping burden that could cover millions of brief communications.”
The level of micro-management required, RVDA said, should be reserved for dealers with a history of questionable business practices.
“Considering that the FTC can fine an RV dealership that violates any of these provisions $46,517 per violation,” RVDA said, “this has the potential to put many small RV dealers out of business for the mistake of a new employee in failing to properly document a transaction.”
Overall, RVDA said consumers will become frustrated when asking the price of a specific RV. Competition will require RV dealers to quote offering prices without necessary add-ons.
“This enormous change in business practices, along with the increased costs, along with the extremely expensive FTC Safeguards Rule may drive small RV dealers out of the industry, losing many of the dealer service centers that can assist customers while traveling,” RVDA said.
RVDA requested the FTC exclude the industry from the proposed rule, then issued a final request.
“Finally, RVDA requests that future FTC references to the RV type known as a ‘Motor Home’ be used with the industry spelling of ‘motorhome,’” RVDA said.
Inside RVDA Objections to FTC Proposal
RVDA submitted a 13-page comment letter to the Federal Trade Commission (FTC) on its proposed Motor Vehicle Dealers Trade Regulation Rule. In the letter, RVDA made two primary objections.
First, RVDA argued RV industry practices differed enough from automotive industry practices the proposed rule tries to capture that the RV industry should not be subject to the rule.
Second, implementing compliance with the proposed rule would create “extensive” and “massive” business operations changes that could put small RV dealers out of business.
The first half of the comment letter discusses the differences between automotive and RV dealers and why RV dealers should not be captured within the proposed rule.
“RVDA is concerned that this proposal is targeted at business practices for automobile dealers who sell motor vehicles,” RVDA said, “However, it sweeps in RV dealers and other types of dealers that have different business models, customers, vehicle customization and business practices.”
Among the differences cited are RVs being discretionary purchases, not used daily like cars and the RV market being much smaller than the automotive market.
The comment letter argued the proposed rule exceeded statutory authority and assumed flawed reasoning in its cost analysis.
Additionally, RVDA said the FTC did not consider the RV industry and its practices when forming the proposal.
“RVDA is concerned that the FTC did not do any due diligence into the RV sales process and simply relied on available data on the automobile sales process,” RVDA said. “Yes, there are similarities between motor vehicle sales, but there are also fundamental differences that place a larger and more challenging burden on RV dealers.”
Among the differences RVDA cited is the preparation necessary to deliver an RV to a consumer.
“If you had investigated the RV industry, you would have learned that RV sales are different from automobile sales since RV sales are based on adding certain add-ons to the vehicle so it can be used by the customer,” RVDA said. “Without a few key add-ons to the RV, it would be unusable by the consumer.”
RVDA also detailed areas within the proposal foreign to RV transactions, such as leases and captive financing.
The second half of the letter discussed disclosure requirements, add-on products and recordkeeping.
RVDA said proposed rules regarding offering price disclosure were unworkable in current RV business sales models because RV salespeople want to have a conversation/interview with a consumer about intended use before quoting an offering price.
“An RV dealer should be able to quote an offering price to the customer based on a conversation with the customer about their intended use of the RV and how it will be towed,” RVDA said. “Otherwise, if an RV dealer provides an offering price without a conversation, the customer will become frustrated that necessary add-ons, such as batteries and hitch work, can add thousands of dollars to the offering price – and isn’t that what this rule is intended to avoid?”
Freight charges also vary in the RV industry, unlike most automotive deliveries. Requiring an offering price to be disclosed without consideration of a consumer’s location could harm dealers located further from a manufacturer and brick-and-mortar stores competing with online dealers.
RVDA objected to the FTC’s characterization of add-on products as “junk fees.” The comment letter said not all add-ons are questionable and many are necessary in the RV industry.
“Imagine an RV dealer selling a travel trailer to a customer, but not including the hitch work to tow the vehicle in the sale,” RVDA said. “Think about boat dealers who literally purchase a hull from a marine manufacturer, and it is the dealer who installs the boat engines (many manufacturers and price points), radars and GPS devices. Are boats and RVs offering prices to exclude hitches and engines, costing thousands to be excluded from the offering price since they are unknown variables?”
RVDA listed add-ons typically found on RVs, including extended service contracts, hitch work, pre-delivery inspection fees, exterior/interior surface treatments, travel trailer batteries and a second air conditioner.
“It appears that the FTC may limit an RV dealer from creating a unique package of add-ons to an RV to sell to its customers,” RVDA said. “When selling a vehicle to a customer, the (proposed rule) seems to indicate that an RV dealer must disclose the cash price of a vehicle without the ‘add-ons,’ and the dealer must advise the customer that the vehicle can be purchased for the cash price.”
RVDA cited packages to add TVs, awnings and sound systems to RVs for tailgating consumers; off-grid packages featuring solar panels, larger batteries and extra water holding tanks; and sturdier packages created for extended-stay/full-time RVers.
“Please clarify that the RV dealer will not need to obtain a consumer’s express informed written consent before installing special package options tailored to its local market,” RVDA said. “Please clarify how an RV dealer will be able to sell and document these types of transactions without the dealer requiring the consumer to sign a separate disclosure documenting ‘Express, Informed Consent’ for every single dealer-installed item.”
The comment letter also addressed recordkeeping requirements in the proposed rule, citing the small nature of many RV dealerships. Generally, dealers would be required to retain all communication from completed or abandoned transactions for two years.
“One-third of RV dealers have five employees or less. There are so many modern platforms through which a consumer and an RV salesman may communicate that this is an unrealistic burden for small businesses,” RVDA said. “Communications may be through the website, social media, (or) a cell phone application. It could involve a salesman texting with a work phone (or) texting with (a) personal phone. It can involve phone calls and other devices not controlled by the RV dealership. This is such an incredible recordkeeping burden that could cover millions of brief communications.”
The level of micro-management required, RVDA said, should be reserved for dealers with a history of questionable business practices.
“Considering that the FTC can fine an RV dealership that violates any of these provisions $46,517 per violation,” RVDA said, “this has the potential to put many small RV dealers out of business for the mistake of a new employee in failing to properly document a transaction.”
Overall, RVDA said consumers will become frustrated when asking the price of a specific RV. Competition will require RV dealers to quote offering prices without necessary add-ons.
“This enormous change in business practices, along with the increased costs, along with the extremely expensive FTC Safeguards Rule may drive small RV dealers out of the industry, losing many of the dealer service centers that can assist customers while traveling,” RVDA said.
RVDA requested the FTC exclude the industry from the proposed rule, then issued a final request.
“Finally, RVDA requests that future FTC references to the RV type known as a ‘Motor Home’ be used with the industry spelling of ‘motorhome,’” RVDA said.
Subscribe
Categories