GM Warns Dealers Over Corvette Z06, Silverado EV Market Adjustment Fees
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General Motors has sent a letter to its dealer body, warning them they could have their vehicle allocation redirected if they charge customers above MSRP for products like the 2023 Corvette Z06 and 2024 Chevy Silverado EV, among others.
Car dealerships will often apply so-called market adjustment fees to new vehicles that are in high demand or that may be hard to come by to increase their profit margins. In the letter sent to dealerships this week, GM said it is aware of some dealerships that have been “demanding money above and beyond the reservation amounts set in GM’s program rules and/or have requested customers to pay sums far in excess of MSRP in order to purchase or lease a vehicle.” This applies to 2023 Corvette Z06 and 2024 Chevy Silverado EV orders, but also those of all upcoming products such as the Cadillac Lyriq, the GMC Hummer EV pickup and Hummer EV SUV, the GMC Sierra EV as well as the Chevy Equinox EV and Blazer EV crossovers.
In the letter, GM said it will be “forced to take action if it learns of any unethical sales practices or brokering activities that undermine the integrity,” of its brands. This could include rerouting a dealership’s 2023 Corvette Z06 or 2024 Chevy Silverado EV allocations to a more well-behaved storefront, or taking “other recourse prescribed by the Dealer Sales and Service Agreement.” It’s worth noting that GM has no legally backed way to force dealerships to sell its products for a certain price, so these retailers are not breaking the law with this practice, but are simply engaged in behavior that GM corporate finds unbecoming of the brand.
While market adjustment fees are nothing new, they have garnered more attention amid the COVID-19 pandemic and microchip shortage. With vehicle demand high and inventory levels at record lows, dealers are looking to capitalize on consumers’ desperation and squeeze high market adjustment fees. Back in July 2021, we reported on GM dealers marking up C8 Corvette units, in one case by as much as $99,516 over the car’s MSRP.
It will be interesting to see if GM’s threat to pull product allocation from certain dealerships will prevent market adjustment fees from being applied to the C8 Corvette Z06, 2024 Chevy Silverado EV and other future in-demand Cadillac, Chevy and GMC products.
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ON AND ON THEY SAY THAT CRAP BUT IF THEY LOOKED ON THE INTERNET AND WATCHED AUTOLIST CARGURUS ETC. THEY WOULD SEE THAT THEY ALL HAVE CARS ON THEIR LOTS FOR DAYS AND WEEKS AND THEY KEEP GETTING THEM. NO REPURCUSSIONS
Nobody cares about that ugly electric Silverado anyway. Fix your lifter issue if you care about your customers
GM may warn Dealers…
But they never warned consumers that their ignitions were going to Kill them one day.
GM…..what are you going to do about it???? Dealers are not listening!#!
Going on 8 months here waiting on my camaro. Dealership told me they wanted 3k over sticker. I told them I’m not paying market recovery prices an they came back down to sticker. I still told them not paying sticker price either 🤷♂️
going on 8 months here waiting on a camaro. Dealer marked it up 3 k over sticker. Told him I’m not paying for market recovery bs. Said he take sticker I told him I’m not paying sticker either🤷♂️
Just curious, do you have a firm order, aka a “Sold Order”. If so, the price you agreed to is already set. If you do not have a sold order – it sounds like when the dealer gets it – it’s available to anyone wanting to pay their price. All I’m saying is that it seems backwards to still be negotiating price on a sold order. Now – if you do have a sold order and the dealer is not standing by the price on the purchase agreement – run.
Author:
Read the letter again. That is not what it says at all. It has three parts…
One. Dealers should not use car brokers
Two. Dealers should not charge more for reservations on future vehicles than Chevrolet dictates. I.E. Silverado EV is 100.00 reservation.
Three. Dealers should be selling vehicles in an ethical manner.
Look at the Manheim Market Report on the vehicles, Dealers are selling vehicles for less than the “Wholesale” value.
Rather not say:
Are you saying that this article misrepresents the letter from GM. i.e. – That the GM letter is not primarily focused on or for that matter even specifically mentions dealer markups above MSRP.
John,
The letter had 3 points as previously mentioned. Read it and see what your opinion is. It was definitely written by and attorney who is very familiar with the GM Sales and Service Agreement. Frankly, the market is high right now. This is unprecedented and temporary. If the wholesale value of a vehicle exceeds the retail purchase price, i.e. “MSRP” and “Customer Satisfaction” is also at an all-time high as referenced in recent news articles, sounds pretty ethical.
I tried to buy a C8 yesterday after reading about this.
I was told that if I custom order the car from GM they will add on $10k to the MSRP.
If I want to buy off the lot the markup is $30k across the board.
They said the ones on the lot were cars that were custom ordered and then the buyer backed out. (Why the hell would anyone do that?)
Order from me, I don’t charge over MSRP. Located in Metro Detroit, shipping nationwide. Looking at about a 10-12 month wait currently. Shoot me an email: cole(dot)gagliano(at)genesischevy.com
What about all those years dealerships were pinned against each other and forced to discount cars in order to “earn customers business”. Or what about all the people getting overvalue for their trade ins. So in that case should customers get offered what their trade would “normally” be worth? You can’t have your cake and eat it too by expecting dealers to offering retail for trade ins but MSRP for new cars. Besides – MSRP stands for MANUFACTURERS “SUGGESTED” RETAIL PRICE. However in this market people are willing to pay more and at the end of the day no one forces anyone to buy a new corvette. All pricing is full disclosure and no one is forced to buy anything… so in this case there is 1 car for every 20 buyers. Personally I think there’s a free market for anyone to ask whatever price they want
Lawrence , the truth is not what some on here want…….Some feel so entitled , they have asked biden to issue an Executive Order that makes reselling a C8 for a profit , is only legal for Gov Employees & the elected….
The markup is the reason I haven’t bought a new one. I already own a 2018 Grand Sport – why should I pay 30,000 over MSRP? I have told several of the dealerships to call me when the upcharge goes away and we will do business.
30,000 can you get you quite a bit like a Z06 –
Unfortunately Steve, if my Z06 list at my store is any proxy, the C8 Z06 is already sold out for the entire model year, so you’re probably not getting a call.
*Model run. 2023 model year sold out 2 years ago.
I’m one of the lucky ones – I have my C8 – a Sebring Orange 2021 Z51 3LT Coupe and I’m darn happy I do. I love it. I’d also love to get a C8 Z06, but this is getting crazy. If all production through 2023 is already sold out – dealer markups and resale prices aren’t going to change any time soon. Many dealers are not even returning calls – probably because their “lists” are already unrealistically long. Frankly, I’m not sure what being on “a list” really means. Probably something different depending on the dealer. Just don’t count your chickens just because you’re on a “list”, especially when all it takes jump the list is agreeing to a higher markup – at some dealers anyway. If you don’t have a purchase agreement – all you have is a promise. And a “promise” – as you’d well expect – also has a different meaning to different dealers.
We should start a list of all the dealers that will sell at MSRP or less. Sorry though, I can’t contribute cause the dealer I use doesn’t qualify
i saw on CNBC this morning that the C8 is #2 on the list of cars worth more used than new . It said the C8 is valued at $22K+ over sticker. That info was from KBB.. So , to all of you that will Not pay a premium…. keep dreaming and waiting ,