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GM threatens predatory dealers with order cancellations, non-transferrable warranties (msn.com)
Byron Hurd

July 29, 2022

Tire Sky Car Wheel Land vehicle



General Motors will launch a second salvo against misbehaving dealerships next week with a new set of policies aimed at curbing predatory markup strategies. With the new Chevrolet Corvette Z06, GMC Hummer EV SUV and Cadillac Escalade-V about to head into production, GM is putting its foot down yet again. Dealers that attempt to circumvent GM's markup restrictions by dealing directly with brokers or other resellers could find themselves in a particularly nasty spot, as the company is threatening to withhold future allocations and end the transferability of warranties when dealers facilitate the reselling of vehicles within 12 months.

While this may help curb some dealership chicanery, it's possible the real loser in such a deal could end up being the customer who unwittingly ends up with an un-warrantied vehicle. We suspect GM has accounted for that, but we'll have to wait until next week to find out exactly how these new policies will be enforced. Here is Friday's communication in its entirety:

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Wonder if any of this is to divert attention from the chicanery of 100K undelivered vehicles with no information from the OEM.
No problemo! Don't worry be happy! We're going to get right back to you on that, sir!
 

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I was at the GMC dealership I go to for service, and they told me about a month ago someone got a new Hummer EV, and within a week resold it for over double the price.
 

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Discussion Starter · #8 ·
What part of 'it goes both ways' doesn't GM understand?
Does GM subsidize reduced dealer profit levels with poor selling vehicles they may force dealers to take?
You mean all the massive discounts GM has given over the decades? GM, or rather GM's management, pays a large price if they let dealer inventory get out of hand - Wall Street punishes their stock price which impacts the executives stock options and how much money they can pocket.
 

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I definitely don't like hearing that - just drives the cost up for everyone.
Have you checked out used C8 prices? You can find gobs of them with around 2000 miles for 115,000.00 to 145,000.00. I don't blame GM for starting the ZO6 at 106,000.00. Might as well get some of the profit instead it all going to flippers.
 

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I know there are some car salesmen on this forum making huge bonuses off these “market adjustments“, but you guys have to understand it’s amoral to sell a vehicle for more than it’s actually worth. It’s gouging. I realize most people expect to get screwed at a dealership, but that doesn’t make it right.
This is hard, when desirable product are available at decent prices, there’s always going to be people wanting to make money, be that dealer’s Adding above MSRP payments to buyers immediately flipping their purchase for instant profits.

The old protections of volume of sales and only a few rogues has been swept away with everyone now in on making instant cash. So sad and I don’t thi GM’s sabre rattling will do any good because state laws protecting dealer franchises from over bearing OEMs will see some of the “threats” either dialled back or defeated by court action.

I see that Ford is trying to lock in set pricing for Lightning but also insisting on leasing being Hand back to Ford, the purchase option is gone. Maybe this is Ford’s way of keeping stronger vehicle prices to itself……if you have a lease it wouldn’t matter if you’re just turning in your vehicle for a new one….unless you could get near the original sale price for it…
 

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I know there are some car salesmen on this forum making huge bonuses off these “market adjustments“, but you guys have to understand it’s amoral to sell a vehicle for more than it’s actually worth. It’s gouging. I realize most people expect to get screwed at a dealership, but that doesn’t make it right.
It is impossible to sell a vehicle for more than it is worth. It is worth exactly what somebody is willing to pay. It’s definitely not immoral unless you are intentionally trying to take advantage of somebody who doesn’t know better. But if they know that the MSRP is X and they are okay and willing to pay 1.5X then I don’t see a problem at all.
 

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GM could fix all this by getting ample inventory out there. Nobody’s going to pay over MSRP when there’s tons of vehicles in the lots.
 

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It is impossible to sell a vehicle for more than it is worth. It is worth exactly what somebody is willing to pay. It’s definitely not immoral unless you are intentionally trying to take advantage of somebody who doesn’t know better. But if they know that the MSRP is X and they are okay and willing to pay 1.5X then I don’t see a problem at all.
A complication would be if the vehicle get written off shortly after purchase, how much does the insurance company pay? Owner takes the loss but if you’re upside down with a loan, things start looking really bleak. Maybe it would be best not to put customers in that situation to begin with….

I get your point though, it’s human nature to pay more for something that really desirable, either to have or flip again for quick cash. It’s hard to see how to end this , building ,pre inventory a you suggested might help but I really don’t see the benefit to the manufacturer unless they build just enough (very fine line).
 

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It is impossible to sell a vehicle for more than it is worth. It is worth exactly what somebody is willing to pay. It’s definitely not immoral unless you are intentionally trying to take advantage of somebody who doesn’t know better. But if they know that the MSRP is X and they are okay and willing to pay 1.5X then I don’t see a problem at all.
If you want it bad enough you will pay. But eventually it’s going to get out of control and the bubble will burst. Housing prices are going up so fast that new first time buyers can’t even buy in right now. The market is set for a correction and the same will come with cars. All those dealers that charged huge mark ups won’t even have a customer base because all their customer’s will be upside down in the market adjustment loan they put them in. Nothing good has ever come from greed.
 

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I went to my local Buick GMC dealership Friday to look at a Yukon Denali - which they did not have in stock. While there, I checked out a 2021 Sebring Orange Corvette. It felt a little more cramped inside than my 81. They were asking $97k, original MSRP was $79K!
 
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I know there are some car salesmen on this forum making huge bonuses off these “market adjustments“, but you guys have to understand it’s amoral to sell a vehicle for more than it’s actually worth. It’s gouging. I realize most people expect to get screwed at a dealership, but that doesn’t make it right.
I have a "one of a kind" 2000 Millennial Edition Beanie Baby, it has to be worth at least $50,000 I will split the profit of it with you; just give me $25,000 and it's yours!...

You mean all the massive discounts GM has given over the decades? GM, or rather GM's management, pays a large price if they let dealer inventory get out of hand - Wall Street punishes their stock price which impacts the executives stock options and how much money they can pocket.
GM can fix this, one of two ways or a combination of the two:
A) MAKE MORE VEHICLES
B) RAISE THE PRICES
 
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