Poll: Has GM’s Warning To Dealers Fixed Upcharges?89
In case you didn’t notice, some automotive dealers are charging rather sizable market adjustment fees for new vehicles, taking advantage of low inventory and high demand to significantly bolster their profit margins. GM dealers are certainly guilty of the this, prompting GM corporate to hand down a letter last year warning dealers not to engage in such practices. The question is – did the warning work?
Let’s start by briefly summing up the situation thus far. Following widespread production stoppages and shortages triggered by the COVID-19 pandemic, including the global microchip shortage, vehicle inventory across the nation reached record lows. Demand however, remained high, prompting some dealers to tack on steep market adjustment fees.
These fees were most extreme for popular high-end models like the the C8 Corvette and Cadillac Escalade. For example, back in 2021, one dealer listed a C8 Corvette Stingray 1LT C0upe for $161,111, an eye-watering $99,516 over sticker.
In response to the widespread dealer upcharges, GM sent out a letter stating that “any unethical sales practices or brokering activities that undermine the integrity” of GM or its brands would result in consequences, including rerouting allocation for popular models like the C8 Corvette to a different storefront. Although dealer markups are not illegal, GM found the practice detrimental to the brand and its customers.
Indeed, with so many high-value models coming down the pipe, GM dealers were given several opportunities to greatly inflate their profit margins. Models like the C8 Corvette, Cadillac Escalade, GMC Hummer EV, and Cadillac Lyriq all carry high demand and low supply, and are thus ripe for markups.
So, the question remains – did the warning to GM dealers fix the rampant upcharges?
With regard to the Cadillac Escalade, the answer is definitely no. As GM Authority covered in early February, Cadillac Escalade markups around the country persist, with some dealers asking $15,000 to $30,000 over MSRP. Granted, this isn’t on the same level as the nearly $100,000 markup for the 2021 C8 Corvette that was cited previously, but it’s worth noting all the same.
So, we want to know – do you think GM’s warning to dealers fix the upcharges? Tell us by voting in the poll below, and remember to subscribe to GM Authority for more GM business news and around-the-clock GM news coverage.
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The letter hasn’t worked here in Florida! GM is asking dealers to do something by volunteering to lower their prices? That’s a joke!!! Hit them where it hurts. In their pockets.
Need to go to customer direct ordering from the factory that will salve the problem.
Unfortunately due to dealership protectionist laws in most states, they can’t sell direct. Time to write your politicians.
GM knows the dealers that are engaging in this. They get sales reports. They’re aware of what and where this is taking place. It is as simple as them immediately eliminating shipments of vehicles to those dealerships involved since they have already been warned. GM is not really getting hurt by this practice so its just lip service on their part.
Keep believing that. How much have vehicles gone up over the last three years?
People keep complaining about dealers marking their product up over MSRP. What about consumers buying and flipping for a profit? No problem with that?
Where I live, there is a law against markups on new vehicles but some dealers found a way to bypass it.
Tried to buy a ZO6 but my trust fund wouldn’t allow it. Yeah right ! Did pay 5k over for a LT2 convertible. A shame
Please stop using the term C8 Corvette. C8 is short for Corvette 8th Generation. Corvette in the statement C8 Corvette is redundant. and shows the writers lack of understanding.
Hasn’t helped in Las Vegas. My dealer still wants $20,000 above sticker. We were there just
last week getting service and talked to sales about a new Escalade. They can rust on the showroom before I’ll pay it.
The “Stealers” in my area have either completely ignored and laughed at GM’s weak letter or they pull a cute little trickery where they “sell” the new vehicle to a “straw-buyer” then quickly buy it back at the original MSRP selling price once the title is returned to the straw-buyer. Then the “used” vehicle, with only 100 or so miles on it, is advertised for sale, again, at a huge mark-up over original list price, and the Sales Taxes on the first “sale” are easily “absorbed” in the astounding mark-up they seek to fool buyers with. Recently encountered a 2023 Yukon SLT where the original window sticker on the ad was available and it showed $69,000 MSRP. The same vehicle was being advertised for $79,500 as a “used” Yukon with 225 miles on it. Ignore these dealers/thieves forever and refuse to do business in the future with these price-gouging scumbags.
Appears some dealers are “selling” and titling cars to dealership personnel, then marketing them as used vehicles at what they refer to as market value. Note, pre-owned Cadillac Lyrics with very few miles being priced at Cadillac dealerships at $20,000 over MSRP
Pricing is based on supply and demand. Under prior times GM would have simply produced more. Today that’s not GM’s choice to make, it is their suppliers. Dealers are independent businesses and past law suites have said the manufacturer has limited control over them. Key word is LIMITED. Maybe buyers should just face reality.
Someone clearly doesn’t understand franchising. Yes, the manfaucturer can, at anytime, shut you down for brand damage. Stfu. Tool.
It is on the oem to fix this. Yank the first franchise over this and the problem magically disappears.
Sorry but that does not apply in automotive. Law suits go back to the 70’s and the courts have consistently ruled in favor of the dealership independents and the Mfg. inability to be controlling.
I can understand that . You really don’t want the government to get involved in matters like this. They are involved, and dictate too much the way it is now. We can govern this ourselves by not choosing to do business with those who practice this. There is no stopping it , there is always someone one will to pay the price. If you got it , and chose to. Go for it. If you have ever been in business and had competition around you you are free to set your own prices. That’s why they call it MSRP . So anything over that is ok , I don’t like it ! I choose not to purchase. I would love to purchase closer to home and have good dealers. Around here. Unfortunately they can’t get the cars when I would like one . So I travel and make a day trip of it. No one is wrong on their thinking, it’s what is right for you. Thank goodness we still have a little of American left !
“Brand damage” would have to be proved in a court of law or that the dealership grossly violated their contract.
Very difficult for an OEM to shut down a dealership.
Did GM follow up on the dealers that charged a dealer adjustment , and remove their allocation so they were not able to order any more cars . I buy from a dealer that won’t ask over msrp. I did pay msrp for our 22 htc. Also we are picking up our ZL1 tomorrow. Ordered back in December.
Is it wrong ? Maybe , do I blame them , I understand supply and demand. I would choose not to do business with them
Not all dealers are dishonest. The dealer that I bought my C8 from did not and still does not believe in gouging owners. Even the Z06 didn’t get marked up. He is 270 miles from me and overall they are great and I believe they have one of the largest C8 allocations in the country. The nearest Chevy dealer to me marked up the Z06 $100,000! Years ago I wanted to buy a Shelby Mustang but the dealer had an additional $30,000 on the window I called him a crook and left. When the 1990 C4 ZR-1 came out they were $65k, o btw we’re charging you an additional $40k. GREED!
Gouging is a made up term that doesn’t exist. Yes, this practice needs to stop, it makes gm look bad. (or any oem that has dealers pulling this stuff.) but nobody is forced to buy. I’m sick of the fact that stupid politicians have convinced IQ’s that gouging is a thing that exists.
Exactly right. Capitalism is all this is. Tired of paying a mark-up? Don’t.
Sure, I get it, some people have no choice but to buy a car right now. But if you have a choice and aren’t happy with prices then don’t buy one.
My Sierra will soldier on for several more years given the prices on new right now.
In Los Angeles, a dealer wants $100,000 over MSRP for a Black Corvette Z06. Mary doesn’t give a care about ICE cars because she is colluding with Biden on EV. I’m never going to buy an EV!
Re FL comment. Jenkins Chevrolet in Venice has added money on everything – $5000 on Traverse, Trailblazer, etc. Lesson – don’t threaten your kids with something you are not prepared to follow through on.
GM is just as greedy as the dealers..they are in bed together to make money and GM will do anything it can to support
t their franchise…The public announcement to the dealer was just a facade to appease the potential customer who wants their product…If GM meant business, it would have put teeth in their”demand” to the dealers and made an example of any dealer violating their policy and publicize it..GM ..just like politicians think the public is gullible and ignorant and will swallow anything that they are told !!
Try Dixie Buick GMC in Fort Myers, FL. They honored my GM employee pricing on a new Yukon Denali.
Very fair place to do business with, they are interested in your next purchase.
I’ve found dealerships to treat you much differently if you come in with GM employee status for pricing.
When will the GREED IN BUSINESSES STOP!!!. They making customers go to the imports DESTROYING THE LOYALLY TO THE AMERICAN AUTO MANUFACTURERS.
Huh? It’s just as bad at Honda and Toyota dealerships. This isn’t unique to GM, not even a little.
What’s an AMERICAN AUTO MANUFACTURER? Asking for a friend…….You do realize that many manufacturers not named GM, Ford or Chrysler make the majority of their vehicles in North America? Is your Ford made in Mexico an issue? Is your GM product made in Canada an issue? Our C Class Mercedes was made in Alabama. Have you ever read the parts content on any window sticker? No such thing as an American Manufacturer.
Hi Dan B
Just wondering, are you suggesting that all new gm car buyers go to the dealers with a gun and threaten the sales person with instant death unless they subscribe to the customers pricing philosophy?
Also, does gm have a pricing markup to establish the MSRP or do you think that gm simply sell their products at cost? Just wondering?
diminish a dealers allocation in proportion to the total amount that dealer overcharges.
What do you suggest for regulating the consumer reselling for a profit?
” GM found the practice detrimental to the brand and its customers ” ??? 🤣🤣🤣🤣
Come on GM!! You make huge markups catering Corvettes, Escalades, Lyriqs and Hummers to China because you make more profits than you do here in the Canadian Markets- You ship product to Australia, Europe and the Middle East as well. You brag how much profits you’re making online around the world for all to see then you chastize Dealers in North America who are starving for Inventory as salesmen and saleswomen try to make a living from an empty store?….Just one example of the integrity and commitment to our Customers is that My Dealership has been selling all of our factory ordered Corvettes at MSRP!! Preston GM is also a proud Sponsor of the British Columbia Corvette Club of which I am also a Member – It would be great if GM practises what it preaches-EH?I’m certain I’m not alone in thinking that GM cares more for its Shareholders than the Salespeople who strive to support our Great Brands….. Integrity should be a two-way street.
I think your comment is dead on, as I suspect gm doesn’t establish a uniform MSRP for all gm retailers throughout the world.
I had a dealer say they would accept GM employee discount. When I got the quote the numbers didn’t add up. I questioned this and they told me yea they were going to accept employee discount, but they would only apply half and keep the other half because of ” current market conditions”. There were some other garbage fees I don’t recall and charging $1k for tint and other dealer installed items were much higher than usual.
There is no markup on the Chinese Buick. Chew on that one American Patriots.
The only problem that I fear is if there is a problem getting parts for the Chinese Buick Envision, how long could your vehicle be broken down waiting for the parts ?
A dealership near me has, for several years , marked up Corvettes and 2500 / 3500 HD trucks $10,000 and $5000 respectively and I assume they continue to sell for them. I’ll never understand why someone would deal with a dealership that does that. Supply and demand , maybe. But there are plenty of other GM dealerships around.
Just don’t do business with dealers who overcharge. Any dealer can sell you the exact vehicle, and have it delivered to you locally. Don’t fear buying from a distance. If everyone did this, the honest dealers would prosper, and the rest would want to follow.