Update re Pricing Transparency - Freight and Setup Charges

Over the past several months, the NPDA has been working with the major powersports manufacturers on greater transparency in the way freight and setup charges are disclosed. Because freight and setup are necessary components of the retail transaction, those costs should be reflected in the pricing structure established by the manufacturer. When a manufacturer publishes an MSRP that excludes freight and setup, it creates customer confusion, erodes confidence in the pricing process and ultimately reflects poorly on the entire industry.

The FTC, and state regulators, have made clear that an advertised price must include all known mandatory charges. As dealers move toward compliance, the disconnect with manufacturer advertised prices becomes even more apparent. Customers see one price on the OEM website and another when they shop the dealer’s inventory, leaving the dealer to explain the additional freight and setup costs.

NPDA has had productive discussions with the major powersports manufacturers, and we are beginning to see movement. Several OEMs have changed—or are in the process of changing—the way pricing is disclosed on their websites. Those changes are a step in the right direction, but NPDA continues to push for more complete pricing transparency.

NPDA believes the manufacturer’s suggested retail price should reflect the normal known costs required to get a unit ready for retail sale. Dealers will continue to establish their own selling prices based on their markets and business models, but the suggested price presented by the manufacturer should give the customer a realistic understanding of the retail price of the vehicle.

There is still more work to do. NPDA will continue pushing for pricing that includes the known freight and required setup costs associated with completing each vehicle’s final assembly, inspection, and preparation to ensure it is safe, fully operational, and ready for delivery—providing every customer with the best possible ownership experience. More consistent pricing between OEM and dealer advertising will make compliance easier for dealers, provide customers with more accurate pricing from the beginning, and improve the retail experience across the industry.

Michael Maledon

NPDA Board Member