General Motors in the US is penalising buyers of some of its more expensive, high-demand vehicles who quickly resell them.
More specifically, it’s targeting buyers who purchase a new Cadillac Escalade-V, Chevrolet Corvette Z06 or GMC Hummer EV, with purchase agreements shared online detailing the penalties for buyers who try to resell within the 12 months after taking delivery.
We’ve contacted GMSV to see if it’ll employ similar penalties here in Australia, where it sells Corvettes and Silverados.
GMC Hummer EV
“You will be ineligible to place vehicle reservations or place a sold order with a dealer for certain high-demand models (as identified by GM),” one agreement warns buyers intending to resell during this period.
“The Bumper-to-Bumper, Powertrain, Sheet Metal, Tire and Accessory coverages under GM’s New Vehicle Limited Warranty will be voided,” it adds.
“Given the impact on warranty coverage, you are also agreeing that, if you choose to sell this vehicle within one year after you have taken delivery, you will communicate the loss of warranty coverage to the transferee.”
Cadillac Escalade-V
Automotive News reports the change was communicated to dealers last Friday by GM North America president Steve Carlisle.
“When vehicles are quickly resold, particularly by unauthorized dealers or other resellers that do not adhere to GM’s standards, the customer experience suffers and GM’s brands are damaged,” said Mr Carlisle in his letter to dealers.
“These changes are being implemented to ensure an exemplary customer experience, to ensure our brands remain strong, and to help prioritize ownership by brand enthusiasts and loyal customers.”
Chevrolet Corvette Z06
GM is in a position where it has a number of expensive models in hot demand, but is trying to tamp down on reselling and high dealer mark-ups.
In a letter to dealers earlier this year, where he name-checked not only the aforementioned models but also the Cadillac Lyriq, Chevrolet Silverado EV and yet-to-be revealed GMC Sierra EV, he reminded dealers to act ethically.
“Unfortunately, it has come to our attention that in connection with some of these announcements and launches, a small number of Dealers have engaged in practices that do not support a positive sales experience for our customers,” Mr Carlisle said.
“This puts our collective interests at risk and generates negative press that reflect poorly on GM’s brands and your dealerships.”
Chevrolet Silverado EV
He specifically cited dealers that have both marked up the price of these cars but also asked for larger reservation amounts, as well as dealers who have worked worked with brokers to promote new vehicle allocations.
GM threatened to redirect the vehicle allocations or “take other recourse” for “the small minority of bad actors”.
It’s not the only producer of high-demand vehicles to warn both resellers and gouging dealers.
Toyota has told Japanese buyers of its supply-limited LandCruiser 300 Series to commit to not reselling their cars within 12 months of purchase, albeit ostensibly to keep them out of the hands of terrorists.
Cadillac Lyriq
Toyota Australia said earlier this year it would take a dim view towards dealers charging excessive mark-ups for the model locally, and would look into all claims of dealer-level price gouging within its franchise network.
Ford has warned dealers to avoid marking up the F-150 Lightning in the US, and told Australian buyers to shop around if they find Ranger delivery fees to be too high.
Genesis and Hyundai in the US have also sent letters to dealers telling them not to engage in bait-and-switch pricing tactics.
Keyword: General Motors cracking down on resellers of in-demand vehicles