Poll: Has GM’s Warning To Dealers Fixed Upcharges?
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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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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?