Late last month, General Motors filed suit against automotive dealer group Gurley Leep for fraud and unlawful conduct. Filed in the federal court of Iowa, General Motors claims that the dealership moved around a fleet of more than 1,400 new Chevy Malibus between its locations in Indiana and Iowa, and then claimed that the dealership would advertise the cars as “used” or “like new”.
The General states that it paid Gurley Leep tens of thousands of dollars as part of its cash incentive programs. The automaker claims that Gurley Leep’s actions hurt its bottom line.
General Motors didn’t provide comment to Indiana-local ABC57, while Gurley Leep provided the following statement to publication:
“In reviewing the notice, we disagree strongly with the allegations and consider them entirely unfounded and without merit. This action is unprecedented and will be vigorously defended. We have prided ourselves on having exceptionally strong relationships with the 30 manufacturer partners we have represented over the past 35 years. While dealers and manufacturers have disagreements from time to time, we are confident that when the facts are presented, the courts will find in our favor.”
The GM Authority Take
We’re not going to draw any premature conclusions, but feel it is important to note that automakers, including General Motors, offer bonuses and incentives to dealers post-sale when and/or if they sell a vehicle, or if they sell a certain amount of vehicles to reach a certain sales goal.
In addition, it might be worth mentioning that the GurleyLeep website at GurleyLeep.com does not list Chevrolet as one of the brands carried by the group as of this writing.
We’ll see how this one plays out.
Comments
The outcome of this should be interesting, I hope it doesn’t result in less incentives from carmakers. I hope GM Authority will let us know the outcome.
Holdback is not tied to volume
Pretty sure you are right there. But there is a second secret bonus paid after certain volumes are met.
I have dealer traded with Gurley Leep many times over the years and have found them to be above board. I truly hope the big monster looses! They always screwing the dealers!!!
Agree with Thom. Holdback is money tied to each vehicle regardless of additional dealer paid incentives. Typically dealers and GM have set this to cover added floorplan expense and this looks to be from one of the volume delivery incentives manufacturers run from time to time.
So are the titles changing and thus they are then sold used… And thus because of msnufacture discounts they are able to sell the cars for less… Interesting…
Hmmm, there may be some truth in GMs allegations:
http://www.gurleyleep.com/searchused.aspx?year=&make=chevrolet&model=&bodystyle=&price1=&price2=&trim=undefined
They seem to have quite a selection of low mileage “used” Malibus
From what I understand Leep’s local franchise ( http://www.lujack.com ) went from one of the lowest in sales to one of the highest volume Chevy dealers in the USA in 2-3 years. That is what got GM investigating what was happening.
http://qctimes.com/business/gm-claims-q-c-dealer-committed-fraud/article_4cb04288-5f90-11e2-937a-0019bb2963f4.html
It is sad, really sad, that dealerships have become such havens for deception and fraud. My recent experience in buying a new car was particularly bad. So what ever happened to the Saturn buying experience where a customer could go in without expecting a manipulative game? GM is missing an opportunity here. It was the buying experience that attracted me to Saturn. Now that’s gone and I dread buying a new car. It’s a large part of the reason I keep cars for so long.