The Most Important Tool on the Showroom Floor: The Monroney Label
When you step onto a showroom floor, besides the obvious four wheels and the fear of a bad deal, there is one thing that you’ll find on every car: the window sticker. Also known as the Monroney label, this universal data sheet is mandated on all new passenger vehicles weighing 10,000 pounds or less that are sold in the U.S. Its purpose is to provide essential vehicle information to shoppers and protect them from being swindled.
The Monroney label lists crucial details about the vehicle, such as its equipment, safety rating, fuel economy, origin of parts, and suggested retail price, without any marketing spin. This information is verified by the federal government, specifically the EPA (Environmental Protection Agency) and NHTSA (National Highway Traffic Safety Administration), ensuring that it is standardized across all automakers. According to Alex Epstein, the director of Transportation Safety at the National Safety Council, the Monroney label is an excellent communication device for both new and used cars at the point of sale.
The Monroney label holds significant importance in helping consumers make informed decisions about the value of a new vehicle. Its absence can lead to a hefty $1,000 fine for manufacturers. Furthermore, altering the label before reaching the dealership can result in a fine and even a year in prison. The penalties attached to the label emphasize its importance in providing accurate information and preventing deceptive practices.
But what exactly is a Monroney label, and how did it get its name? The Monroney label originated from the demand for more information by car shoppers. Senator Almer Stillwell “Mike” Monroney, a Democrat from Oklahoma, sponsored the Automobile Information Disclosure Act in 1958, which coincided with the 1959 model year. This act mandated that the window sticker display specific details such as the make, model, VIN (Vehicle Identification Number), final assembly point, dealer information, manufacturer’s suggested retail price, optional equipment, and total MSRP (Manufacturer’s Suggested Retail Price).
Contrary to rumors, Senator Monroney’s motivation behind the bill was not personal vendetta resulting from his family members being cheated by car dealers. Instead, the law was a response to the complaints of abusive treatment by automakers towards dealers, particularly in the allocation of franchises. Monroney aimed to ensure fairness in the automotive industry, stating that dealers who were honest about the “list price” of a vehicle couldn’t compete with those who added excessive charges to give the illusion of a better deal.
The Monroney label has undergone several updates throughout its history to keep up with changing times and consumer demands. One significant addition came in the mid-70s when, in response to the OPEC oil embargo, the fuel economy portion was included on the label. This development was mandated by the Energy Policy and Conservation Act, which required fuel economy labels to be displayed on the window sticker of all new light-duty cars and trucks.
In 1994, the American Automobile Labeling Act introduced further changes to the Monroney label. Automakers were now required to disclose additional information, including the assembly location of the vehicle, the percentage of equipment originating in the U.S. and Canada, and the country of origin of the engine and transmission. While sourcing this data has become more complicated over time, it provides consumers with a standardized and comparative snapshot across different vehicles.
Another significant improvement occurred in 2007, with the introduction of the New Car Assessment Program’s (NCAP) “stars for cars” crashworthiness rating system. While the NCAP had been assessing crash safety since 1979, it wasn’t until this time that the NHTSA started including the rating system on the Monroney label. The 5-star rating system quickly became successful, allowing consumers to determine the safety category of a vehicle at a glance. However, it is important to note that the NHTSA does not crash-test all vehicles, and its regimen is not mandatory for a car to be sold in the U.S., highlighting a flaw in the agency’s mission.
In 2013, the Monroney label underwent the broadest overhaul in its history to accommodate the changing automotive landscape. Due to the Energy Independence and Security Act of 2007, which promoted alternative-fuel vehicles like electric and plug-in hybrid electric vehicles, the label incorporated a host of efficiency data. This included information on fuel economy range, fuel or energy usage per 100 miles, greenhouse gas emissions, smog rating, fuel/energy cost estimates over 5 years compared to the average new vehicle, annual fuel/energy cost based on 15,000 miles, and a smartphone scannable QR code to compare fuel and emissions ratings of other vehicles on the fueleconomy.gov website.
The presentation of the EPA labeling has a direct impact on buyer behavior. A 2018 study by Consumer Reports found that consumers are willing to spend more on a vehicle with better fuel economy when they see the full label. In fact, consumers were willing to pay over $1,000 extra for a new vehicle that saved them $100 per year in fuel costs. This study demonstrates the significance of fuel economy in the decision-making process of car shoppers.
While the Monroney label has evolved gradually over time, there are still areas for improvement, especially as the U.S. vehicle fleet becomes more electrified and truck-oriented. Safety experts and analysts believe that the label should keep pace with advancements in advanced driver assistance systems (ADAS). For example, the Monroney label currently lacks information on important crash avoidance technologies such as electronic stability control, forward-collision warnings, and lane-departure warnings. There is a need for clearer and uniform communication of the functionalities and capabilities of these systems.
To address this issue, the National Safety Council (NSC) and the University of Iowa’s Transportation and Vehicle Safety Research Program have developed the website “My Car Does What” and are urging regulators to streamline the nomenclature. Additionally, experts suggest that the star safety system on the Monroney label should be updated to include ratings for occupant protection in a crash, crash avoidance capabilities, and an overall score combining both aspects. Implementing these changes would empower consumers and enhance the safety features of the label.
However, the challenge lies in displaying all this additional information on the label in a uniform and clear manner. The NHTSA is actively seeking feedback from the public on the best approach to communicate this information effectively. Achieving a balance between the clarity and quantity of information is crucial.
In conclusion, the Monroney label is the most important tool on the showroom floor, providing crucial vehicle information to consumers and protecting them from deceptive practices. Over time, the label has evolved to include details about fuel economy, vehicle origin, and safety ratings. However, there is still room for improvement, particularly in accommodating advancements in ADAS and enhancing the communication of safety information. By continually updating and enhancing the Monroney label, consumers can make informed decisions and prioritize their safety and fuel economy preferences, ultimately leading to a more efficient and transparent automotive industry.