RVDA pushes back against sales regs

Earlier this week I wrote about a proposed new rule from the Federal Trade Commission that seeks to “prohibit motor vehicle dealers from making certain misrepresentations in the course of selling, leasing or arranging financing for motor vehicles.” Turns out, that doesn’t apply just to your Ford F-150 or Mazda Miata: “motor vehicles,” as defined in the Dodd-Frank Wall Street Reform and Consumer Protection Act, includes recreational boats, motorcycles, motor homes, recreational vehicle trailers and slide-in campers–to RVs in general.

No surprise, then, that the motorcycle, automobile, RV and marine trade associations have come down with both boots on this one. Mark Steinbach, a past member of the board of directors of the National Association of Consumer Advocates, suggested as much back in July, when his written comments to the FTC warned that the various associations “will be circling the wagons” and claiming “that there is no need for the new rule, that everything is hunky-dory” just the way it is. If only.

Start with the claim that the proposed rule is “ill-conceived, ill-supported, ill-coordinated, untested and unlawful.” That’s just one of the opening broadsides from the National Automobile Dealers Association, which filed a 364-page series of arguments to expand on the idea that each problem the proposal addresses “is already regulated under existing law”– which is to say, hey, everything is hunky-dory. That 364-page rebuttal, by the way, is only ten times as long as the FTC’s actual proposal, which brings to mind that old line about brevity being the soul of wit. This is wit-less.

NADA’s submission, as was true of all industry responses, was filed Sept. 12, on the very last day of an 80-day comment period. This was true as well of the RV Dealers Association, which chipped in with its own 13-page argument–which the FTC didn’t post on its website until Sept. 16– detailing why RVs shouldn’t be lumped in with other wheeled conveyances that are sold, financed and titled by dealers. Given all the time it had to prepare its brief, one might wonder why the RVDA did such a skimpy job of it.

The RVDA’s basic line of reasoning begins with the observation that RVs are discretionary purchases, unlike other motor vehicles, and for their buyers are “not essential for their daily life activities, but a means to escape from their daily lives.” That distinction is important to the RVDA because the FTC’s “stated purpose” for the proposed rule is “to protect consumers for essential motor vehicle purchases used for daily activities.” Translation: federal regulations that apply to “essential” purchases are too rigorous for an industry that sells non-essential ways for its customers to “escape from their daily lives,” even if those purchases may easily cost several times more than “essential” ones. Escape that, you yahoos.

There are a lot more specious arguments of this sort in the RVDA brief, from the observation that the RV market is considerably smaller than its automobile counterpart, to a somewhat strained claim that the RV industry needs special regulatory treatment because RVs are not as standardized as automobiles—that “in the RV industry it is customary to prepare a vehicle before a customer is able to use the RV.” At bottom, however, the RVDA is simply claiming that the FTC is trying to solve a non-existent problem—but that if there is a problem, “enforcement should focus on the bad actors, and not treat every dealership as if it is a bad actor.”

Yep–more of the same hunky-dory.

Given that the proposed rule has drawn almost 28,000 comments, scarcely more than a handful of them addressing the implications for RV dealers, it’s entirely possible that the FTC might not even take note of the RVDA’s hyperventilating. But if it does, one may hope it’ll also give a passing glance to the brief comments of Michael Nicholas, an automotive sales manager for the last 25 years who thinks his industry has become immeasurably more transparent over that time period.

“If you really want to go after a business that isn’t transparent,” he wrote in early September, “you may need to look into boat, RV, furniture and jewelry sales, where their markup is huge and a customer has no way of getting [the actual] cost. . . . Try to find the actual cost of a ring or an RV–YOU CAN’T.”

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Taking the ‘vehicle’ out of RVs

“RV” is shorthand for “recreational vehicle,” a point strongly emphasized by trade groups like the RV Industry Association–which represents RV manufacturers–any time someone begins confusing RVs with housing. Sure, a travel trailer or park model may look an awful lot like a single-wide house trailer, but they’re built to different standards and no one, for example, should expect to live year-round in an RV. “RV housing?” No such thing, regardless of what it might look like.

But once you’ve declared yourself to be either fish or fowl, you can end up in some pretty strange contortions trying to straddle the divide. Take the Recreation Vehicle Dealers Association, for example, which is embarrassing itself these days by claiming that the vehicles its members sell are, well, not just vehicles. Yes, the automobile industry sells vehicles, but those wheeled conveyances rolling down the nation’s highways are “standardized.” In the RV industry, on the other hand, “it is customary to prepare a vehicle before a customer is able to use the RV.”

See the difference? RVs are non-standard. They deserve non-standard regulatory treatment. Special treatment.

What’s got the RVDA all twisted up like that is a proposed new rule from the Federal Trade Commission that seeks to better protect consumers from being ripped off by unscrupulous dealers. Specifically, “the proposed rule would prohibit motor vehicle dealers from making certain misrepresentations in the course of selling, leasing or arranging financing for motor vehicles.” Any RV buyer who has found himself with a 20-year loan for a rolling box that will have a resale value approaching zero in half that time will applaud the sentiment.

While the RVDA may insist that a Class B Sprinter RV is nothing at all like a Sprinter cargo van, both can be subject to the same high pressure sales tactics that the FTC wants to clamp down on: vaguely explained additional charges, deceptive pricing, reams of paperwork that serve as a graveyard of land mines for the rushed buyer. If adopted, the new rule “would significantly alter the way motor vehicles are sold, marketed and financed in the U.S.,” the RVDA laments on its website, “by adding additional disclosures on pricing, vehicle add-ons and onerous new recordkeeping requirements.” The horror, the horror!

Curiously, the RVDA website also states that the association on Sept. 12 had filed formal comments “highly critical” of the proposed rule, asserting that the proposal would “increase sales transaction times for customers and add to the cost of the RVs.” But while the RVDA thereby poses as a champion of the little guy, the supposed filing is nowhere to be found on the FTC’s very comprehensive online repository of comments. Indeed, of the 26,356 comments the FTC had received as of today, apparently only one came from the RVDA: an Aug. 2 request that the FTC extend its Sept. 12 deadline for comments. The FTC declined.

Anyone around this industry for any amount of time knows there’s a huge need to rein in the flim-flam artists–which is not to say that every RV dealer is a con man, but that there’s no easy way to separate the white hats from the black. Government oversight would go a long way toward leveling the playing field, in an industry that is selling the second-most–and sometimes the most–expensive things most people will ever buy. Moreover, adoption of this rule or something quite like it might set the stage for the next glaringly obvious regulatory need: a crack-down on the industry’s deplorable track record on after-sale warranties and repairs, so that newly sold RVs don’t spend their first year in and out of service bays.

Meanwhile, fish or fowl? If RVIA wants to assert that RVs are not housing, while the RVDA is similarly adamant that they’re not vehicles–at least in the conventional sense–then maybe it’s time for a whole new classification with a whole new set of rules. Perhaps RVs are modern society’s chimera, a fire-breathing female monster with a lion’s head, a goat’s body, and a serpent’s tail. But even a chimera needs rules to live by, for the protection of the rest of us.

SEPT. 18 UPDATE: Turns out that the RVDA submission to the FTC, although dated Sept. 12, took four days to make it into the online databank. To learn more about it, see the post that follows this one, probably late Sept. 18.

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