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.
Comments
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.
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!
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.
Hi Henry
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.
Do your homework, there are dealers selling at MSRP!
Best Joke of the day my opinion
A GMC Yukon Denali would have a $XX mark up. A GMC Acadia Denali would sell at MSRP, even at a discount price plus some rebates. Could you see it? Now do you understand why??? It’s so simple!!!!
Estero Bay Chevrolet should be investigated by GM. Friend ordered Z 06 18 months ago. It came in two weeks ago. Dealer added $100K to customer, calling it market adjustment. Customer refused to pay the additional price. Estero Bay Chevrolet then put car on e bay, stating customer refused car. They are CROOKS!
I’ve interacted with several dealers across the country. If anything, I’ve seen the markups increasing…early on $20k to $50k was most common…quite a few available right now at $50k+ markup…a few with over $100k markup.
The 20% or so that say it helped must be the dealers and/or GM execs on this site…
When Cadillac’s CTS-V was first introduced dealers were auctioning off their allocation. It was very low production and some dealers never earned an allocation. One dealer had a bid for $65,000 just for the right to buy the car. I was doing consulting for GM and knew one of the people on the CTS-V Nurburgring team. I talked to her about what the dealers were doing. About 3 days later I got a call from a zone exec saying that he had approval for an “executive dispensational allocation” specifically for me to be delivered to the dealer of my choice. When that dealer was notified he called me to say he wanted to give my allocation to his brother-in-law and I’d get the next one. I told him to reconsider and I was not giving up my allocation. Dave, the zone contact, told him there would be serious consequences if that car didn’t get delivered to me. Not only did I get an early CTS-V, but it was discounted below sticker.
When production and inventory increase and incentives are added, transaction prices drop. Good for the customer, not so good for manufacturers nor dealers due to decreased revenues. Either customers get use to the higher priced reality or go to a direct fixed price manufacturer. Tesla.
Earnhardt Chevrolet in Chandler AZ are charging $100k over MSRP. They had two Z06 2023 convertibles on the showroom floor at that markup. Also they called me with an offer to give me a new allocation to order what I wanted with the $100k markup over MSRP for a Z06.
Found a ZL1 convertible at a dealer near me, store located in an economically disadvantaged area – and they still had a $5000 “adjustment” on the car. Told them no way, magically, the “adjustment” disappeared the next day as they wanted to move the car after having it for several months.
GM did nothing. I canceled an order for a EV Blazer and The Hummer.
Buying a Mercedes GLC43 AMG & a Rivian
Did get my 2021 C8 at MSRP.
The local Chevrolet/GMC/Buick dealer in zip code 32828, has $3,000 discount on most PU Trucks. Not sure off the sticker or all the dealer fluff added to the dealer sticker.
I thought it was a little strange that when this all started it was the C8 Stingray. Then they said you wouldn’t get any more allocations for a ZO6 if they found you were marking them up but at the time you could still do it with the Stingray.
GM is just as much to blame for not being I control of their vendors and supply chains. They are also engaging in market manipulation as well by limiting production of models like the Silverado knowing that they are still in short supply in many parts of the country.
Dealer wanted $50,000 premium for the new Z06. Didn’t buy the car. On the list for the next ZR1. How much extra will they be asking???
As long as the government protects the dealer GM is limited to what they can do.
Dealerships that charge over MSRP are greedy capitalist pigs, crooked pond scum. But when customers flip for over MSRP that’s okay, then it is just fair market price.
There are several dealers that don’t add an extra charge. You can always order your car from any dealer, you would obviously have to take delivery at their dealer or better yet order Museum delivery. That you won’t regret.
My dealer did not markup, list price all the way! Everettbgmc.com. they sell nationwide! In fact most of their vehicles are priced under list!
Got my Z06 at MacMulkin for MSRP. Going to pick it up at the NCM. Pick your Dealer carefully.
I kind of do and don’t understand the outrage some have about dealer markups.
Welcome to living in a capitalist economy.
I regularly see here posts about various models getting discounted, probably because of too much inventory. Where is the outrage on dealers offering under MSRP? 😂
If you don’t like the markup, don’t buy the car. How many actually need a “new” car and can’t just buy a used car? Or put off buying a new car until prices stabilize?
Need factory direct ordering with delivery and prep by the dealer for a fee. Then dealers can sell service and handle warranty issues.
Seems to definitely depend on model.
Seeing ICE Equinox/Blazer in my area listed slightly under MSRP, in general. But Bolt EV/EUV a few thousand over MSRP. Camaro pretty close to MSRP, with some vehicles price history showing steep drops over the last month or two.
I went to Hendrick 1.5 years ago and put a deposit on a Z06. I signed a one-pager stating they will sell the car at MSRP. I recently stopped back at the dealership to get an update. They said it will be at least 2-3 more years before you can order the car depending on their production. I then asked how long is the list on the E-Ray. He said you most likely can get an E-Ray in 1.5 years so I said fine I would like to put down a deposit. They brought the form and it said they would sell it at MSRP however you need to agree to put on a ceramic coating, 3M film on the front, add Lojack etc….. which added another 8K to the car. I said, I don’t what any of those options and they said if you don’t agree you cannot get on the list. He said Hendrick has decided to put that package on all Corvettes. I said, 1.5 years ago I put a deposit on a Z06 and that wasn’t on the form at that time. He said, well when your time comes to order the Z06 you will be required to add that package or you won’t be able to order. Needless to say, I didn’t put a deposit on the E-Ray and asked for my deposit back on the Z06. The dealers are getting like our government, mandating what I have to buy. Sorry nobody tells me what I can and can’t buy. I will take my business to someone who appreciates their customers.
Support a global recession. You really are an idiot! Just search out a dealer that doesn’t do additional mark ups. They do exist.
Usually they pull this garbage on vehicles already in stock. Oh, you like that one! Well, it has rustproofing and paint protection and we can’t very well take it off, can we?
Dealers are only charging what people are willing to pay. 3 years ago people weren’t willing to pay MSRP which is why you always saw things like trucks getting 10-15K of MSRP. If people stopped paying the mark ups they’d disappear but people always want to have their new shiny vehicles. I certainly remember the dealers that have tried screwing us over and they’ll never get any more of my money. Too many honest dealers still out there and they’ll be getting my business and my companies business for the rest of my life.
Economics 101; low supply with high demand equal higher prices. I think GM corporate has every right to hang a consequence over the head of dealers charging exorbitant prices but I also feel that if a buyer who can afford and strongly desires a Stingray should be ok with paying msrp plus 7-10% which can be found almost anywhere. Have you looked at Porsche dealer pricing?
As a follow-up to my last post, I just came back from my local BMW dealership for service on my X5 and overheard a salea rep telling a customer that all their M cars have a $5k additional dealer mark up. GM corporate and dealers are not alone in this well known activity. You bought a dozen eggs lately…….
Got offered a Bolt with a $5000 market adjustment last week. I declined.
The “greed” comments are amusing to me.
In a Capitalist society, anyone can charge anything that they want. Nobody is forced to purchase this particular item! For example, I could charge $500,000 for a half-eaten pastrami, swiss cheese and spicy mustard sandwich. Now, if you’re foolish enough to pay me, that is your problem and you should probably seek professional help.
So where is the poll below?
If you think these markups are high, just wait till GM strikes this fall. UAW is set to strike. Everything I’ve read indicates it. The way I figure it…… If GM can keep the strike going long enough it should allow the parts suppliers to build up inventories. When the strike is over GM will be able to build cars at the pre covid -19 era. Dealer inventories go up and pricing goes back to normal. GM picks up a big bump in market share due to inventories being so high and dealers are again selling for very little markup. Problem solved!
Maybe GM should pay back the dealers for the last 30 years of their cars selling under msrp with razor thin margins. Pretty sad when people take the side of a giant corporation over the dealers who are by and large small businesses. Yeah, there are some giant ones out there, and some have done their fair share of giving the smaller ones a bad name that isn’t fair. Through the “pandemic” and even now, many of those dealers wouldn’t have made it if it weren’t for demand in the market allowing markups because inventory was so low. You want direct market? Are you insane? When your duramax quits and the dealer can’t get the warranty to cover, who do you think is making that call? FYI not your local dealer. The conglomerate GM is. You want them in charge of everything? Good luck.
Ok I purchased my C8 from BOMNIN Chevrolet on Dixie Hwy in Miami, Fl. Just ask for Gabriel. Their service dept is great as well. I did have a deposit on a Z06 (window sticker and nothing else). Cancelled it when I found out the E-Ray was around the corner.
Pot meet kettle.
So only the OEM’s get to “up-charge” buyers with constant MSRP price increases but not their equally shifty dealers?
They deserve each other.
Tried to buy a Cadillac Lyriq only to find the dealers won $20,000 over MSRP. It’s a disgrace for a Cadillac dealer to act this way. I’m just going to buy out the lease that I have and keep the car another three or four years. Are usually buy a car every two or three years but I think I’ll just keep the ones I have, as I am unwilling to do business with General Motors dealers.
Yup, have deposits on a Hummer and a Blazer SS EV. When time comes to order I will cancel because of what GM allowed to continue after the threat of pulling allocations. If they pulled allocations it would have stopped. C8 Z06 & E-Ray both big markups.
Going to replace the GM vehicles with Mercedes GLC 43 AMG for Hummer & Rivian for the SS
No it hasn’t 1 bit. Tried to buy a 23 corvette advertised at msrp and they added a 25k mark-up and I have the text messages and emails to prove it
Yes there are plenty of dealers charging over MSRP and many who do not. As I said before, choose your dealer carefully. My Z06 order is at MSRP and will be delivered soon. No nonsense, no bull$hit, just had to wait my turn in line.
Here in East Tennessee the dealers are still actively marking up the prices.
What’s worse. Now there are dealers advertising No Markup. But instead adding $2-3000 of “extras” That are mandatory. Stuff we dont want like paint protection and some anti-test device. When I said I dont want those, was told is already in the vehicle and part of the deal…
Why ask the question if the letter to Dealers helped when you already know the answer? Of course not, it did nothing. Naturally, the letter was smoke and mirrors, make an attempt to show Consumers how GM does not approve of this practice. Stop pretending to have the consumers best interest at heart. Let’s face it, the sheer greed hurt the GM brand, same for Ford.
I attempted to purchase a C8 up until early 2022 but absolutely refuse to pay over MSRP, never have and never will. Maybe GM can place a price lock on Customer orders to stop this once and for all. Do that for the consumer and you may win back their trust. Honestly, I can care less if GM fixes the problem or not, my hunt for a C8 or any GM product will never happen again. May as well stick with BMW, they did not charge me over MSRP for purchase in 2022 or for my recent purchase this month. If someone plans on paying Luxury prices then stick with a real Luxury brand.
Don’t give up. I previously commented on this column that there are dealers selling for MSRP. I included the name of my dealer BOMNIN Chevrolet, US1 in Miami, FL. You’re gonna have to wait just like everybody else. I waited 2 years for mine. Did Museum Delivery then drove to the Ron Fellows School. The C8 is a BLAST and you will not regret ordering it, doing R8C and seeing your name on the Museum plaque!
It is Mary BARRA’S FAULT THAT DEALERS ARE GOUGING PRICES. IT KILLS THE INTEGRITY OF THE BRAND. I AMM ON MY 6TH CORVETTE 2019 Z06/Z07/3LZ. BASED ON GOUGING IT IS THE LAST GM PRODUCT NI WILL EVER BUY. IF YOU MEAN WHAT YOU SAY CUT OFF THE ALLOCATIONS AND WATCH HOW FAST THIS STOP THIS DISGUSTING PRACTICE. NO SENSE IN B UILDING AN AFFORDABLE SUPERCAR IF ITS PRICED IN LAMBO AND FERRARI TERRITORY.
My Z06 is going to the NCM and I got my invoice today from MacMulkin. I am paying MSRP. They have been great. 5/16 is the day. I will enjoy the ride home…………….
Congratulations, you are one of the few that is happy. I don’t know how long of a drive you will have but enjoy!
DrPiz thanks I will enjoy it.
700 miles 🙂
I hope you have 3M film or some type of protection from getting chips etc since our roads are not like they used to be.
I inquired about applying Raceday film at a local shop in Bowling Green, but they wanted $500 for applying this temporary film and could not schedule me during my trip. I guess they didn’t want the business. I will use a bra and remove it when I get home.