Things are happening fast and furious in Washington as the Federal Trade Commission is wrapping up the calendar year. Of particular note the "CARS Rule" was enacted. Designed to protect consumers from junk fees, the unintended consequences would have crippled many powersports dealerships. However, in a motorcycle dealers' version of a Christmas Miracle, powersports dealerships were excluded.
Yesterday the FTC issued its “Combating Auto Retail Scams (CARS) Rule” which targets bait-and-switch tactics and junk fees. "As was requested by MIC/SVIA/ROHVA, powersports dealers were excluded from the rule," says Scott Schloegel, Senior VP Government Relations for the associations. "We are pleased that the FTC decided to take this targeted approach in the new rule."
The associations had argued in a September 2022 letter to the FTC that the issues they were addressing were not issues experienced at powersports dealerships and the relationships we have with our customers are unique. In addition, the proposals in the rule were geared toward large auto dealerships and would be extremely taxing on the nearly 80% of franchised powersports dealerships that are single-store dealerships.
The CARS rule states “Covered Motor Vehicle” or “Vehicle” means any self-propelled vehicle designed for transporting persons or property on a public street, highway, or road. For purposes of this part, the term Covered Motor Vehicle does not include the following: (1) Recreational boats and marine equipment; (2) Motorcycles, scooters, and electric bicycles; (3) Motor homes, recreational vehicle trailers, and slide-in campers; or (4) Golf carts.
"This is a great example of the hard work MIC does for dealers and the industry," adds MIC Board Of Directors Secretary/Treasurer Jim Woodruff. "Although well intentioned — The new rule is expected to save consumers nationwide more than $3.4 billion and an estimated 72 million hours each year shopping for vehicles — the unintended consequences were unfair to non-automotive dealers. The exclusion recommended and ultimately accepted by the FTC, was the right course of action."