Cash prices for RTO products remain an issue for dealers. Last spring an RTO company settled a lawsuit over cash price calculations and caps on total RTO pricing under the California RTO statute for $13 million. The California statute, like the RTO statutes in five other states (Hawaii, Maine, New York, West Virginia, and Vermont) caps cash prices at a multiple of the dealer’s wholesale cost. The multiple varies according to product category. The specific dispute in the California lawsuit was over how the company was calculating its shipping costs, which the statute allows to be included in the wholesale cost calculation. Specifically, California law defines "Lessor’s Cost" as "the documented actual cost, including actual freight charges, of the rental property, to the lessor from a wholesaler, distributor, supplier, or manufacturer and net of any discounts, rebates, or incentives (CA Bus. & Prof. Code, section 1812.622(k))."
