Powersport Dealerships Are Getting Nervous About Possible FTC Deceptive Price Fines
And they should be.
There's a universal truth that literally every single American knows: dealerships are a true hive of scum and villainy. I say this as a former salesperson who couldn't hack the dishonesty and lasted for exactly three months. But it's a truism that everyone who's ever bought a vehicle from a dealership knows in their hearts, as it's a place where you go to get fleeced.
That's likely why, according to a survey done by KPA a few years back, over three-quarters of Americans don't trust dealerships. Specifically, they don't trust dealerships about their advertised pricing, which is likely the reason why the Federal Trade Commission (FTC) has recently gone after dealership pricing practices and has levied heavy fines against the worst-of-the-worst offenders throughout the United States.
They even put out a list naming names.
But so far, the public shaming and fines have only been for cars, trucks, and SUV dealerships. The FTC hasn't trained its eyes on the powersport market. At least, not yet. Those dealerships, however, are beginning to worry that they're next, as powersports pricing is often far more deceptive to the average consumer than any car, truck, or SUV tends to be due to a number of factors that they absolutely control.
Maybe Don't Be Bad?
In a recent Dealership fiXit Podcast episode, as detailed by Powersports Business, Gene Silas of Brightline Dealer Advisors told the hosts, "Powersports is 100% next. I’m giving it 12 months or less." Silas is speaking of the FTC crackdown on dealership pricing, as while there have been no new regulations or laws given to the FTC, it's taking the existing books and absolutely hucking them at dealerships around the country.
Basically, the issue boils down to powersport dealership pricing, and how more often than not, the price you see advertised, whether online or on the showroom floor, has absolutely nothing to do with your out-the-door price. Why? Because powersport dealerships have further mark-ups, i.e., assembly, freight, a pre-delivery inspection, and a number of other add-ons that aren't disclosed when you go look at the price tag. That, in turn, causes outrage once you get into the finance office and your motorcycle goes from $5,600 to $10,000 all within the span of moments.
Who could've guessed people would be big-mad at that?
And that sort of pricing is what the automotive industry has been charged with, but to a lesser degree, as assembly, freight, and a few other additional fees aren't as prevalent there. Yet, the FTC has been going after those dealerships like my dog chasing grouse—they're going in for the kill. It's no wonder that the powersports industry, then, is now nervous about a possible FTC beat-down.
Nothing, however, has been telegraphed that the FTC is coming yet. And the podcast itself is more about what dealerships could do to hedge against a coming war between the two groups, with Silas stating that dealerships should be proactive and, you know, not be deceptive. But these are dealerships we're talking about, so it'll likely take the might of the United States government to actually make them change.
As well as a good public shaming. Though that'd require them to be able to have shame, and I'm not sure that's possible based on my own experience...
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