Class Action: Contrary to Advertising Claims, Harley-Davidson MSRPs Include ‘Dealer Setup’ Costs

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A California consumer has filed a proposed class action lawsuit in which he claims the manufacturer-suggested retail price (MSRP) of a Harley-Davidson motorcycle he was looking to purchase included “dealer setup” costs despite the company’s advertising representations affirming that MSRPs “exclude dealer setup, taxes, title and licensing.”

The lawsuit, which was filed in Riverside County Superior Court on June 6 and removed to California’s Central District on August 28, states that the plaintiff in 2015 began research into the features, specifications and pricing of a Harley-Davidson motorcycle that he was interested in buying. With regard to pricing, the complaint says, defendants Harley-Davidson, Harley-Davidson Motor Company and Harley-Davidson Motor Company Operations represented in advertising materials that the MSRPs for their motorcycles excluded costs for dealer setup, i.e., a charge for the actual assembly of the motorcycle after it’s shipped to a dealer, as well as for taxes, title and licensing. The suit states that with that in mind, the plaintiff “reasonably anticipated” that he should expect to pay a dealer setup charge to any Harley-Davidson dealer from which he purchased a new motorcycle.

When the plaintiff visited Riverside Harley-Davidson in June 2015 with the goal of buying a new motorcycle, the complaint says, the motorcycles displayed on the sales floor were marked with price tags that prominently stated the products’ MSRPs did not include freight and dealer preparation/setup charges.

The case goes on to say that included in the overall purchase price of the plaintiff’s new motorcycle was a combined charge of $1,399 for freight and prep, a cost that the plaintiff avers was stated on the bike’s price tag as excluded from the total retail price. As the plaintiff tells it, his Harley’s tag did not include the $1,399 as one of the MSRP’s components, and indicated instead that it would be added to the retail price as part of the closing of the transaction. Due to Harley-Davidson’s advertising statements, the plaintiff “did not see any cause for concern about such a charge.” 

However, what the plaintiff alleges he was unaware of at the time was that Harley-Davidson “actually compensated and/or reimbursed” the dealership for performing setup of its motorcycles according to explicit preparation instructions. According to the lawsuit, this meant Harley-Davidson’s advertised MSRPs did, in fact, include dealer setup costs. The company’s advertisements to the contrary were therefore false and misleading, the plaintiff argues.

Moreover, the lawsuit charges that non-party Riverside Harley-Davidson performed “no additional and/or material” prep or setup tasks for the plaintiff’s motorcycle other than those specified by Harley-Davidson in its dealer prep and delivery instructions, even though the plaintiff allegedly paid an extra $1,399 for such tasks.

“Plaintiff was induced by Harley-Davidson’s false and misleading statements, representations, and/or affirmations, and misrepresentations, to pay RHD’s charge of $1,399 for freight and ‘prep,’ which explained and/or justified to consumers that the imposition of a ‘prep’ or ‘setup’ charge (or surcharge) by a Harley-Davidson dealer was reasonable, appropriate, and should be anticipated/expected,” the case reads.

The lawsuit rounds out by stating that it was more than two years after the plaintiff bought his motorcycle that Harley-Davidson began disclosing in its advertisements and online that it reimburses dealers for performing inspection and setup tasks.

The class proposed for certification by the case looks to include anyone who bought a Harley-Davidson motorcycle from Riverside Harley-Davidson between June 11, 2015 and August 22, 2017.