Earlier this year, GM’s North America President Steve Carlisle issued an ultimatum (of sorts) regarding market adjustments and other dealership practices on their in-demand vehicles like the Corvette Z06.
The letter stated that a small number of dealers had engaged in sales practices that cause negative press and reflect poorly on GM’s brands. There were additional warnings in those emails about selling to those who flip the cars to overseas buyers. This is a big no-no from GM, and it can cause the original buyer to be blacklisted from buying new GM products.
Following the release of Carlisle’s letter, we continued to see dealers charging way above MSRP for the simple fact that they can, as dealers are independent businesses who can charge what they want. As a reminder, the ‘S’ in MSRP stands for Suggested, so have a nice day, lol…
Last Friday, we started hearing that GM may be taking a Carrot/Stick approach to customers by offering $5000 in My Chevy Rewards points for buyers who keep their Z06s for 12 months. The points are good for financial payments on GM-financed vehicles, parts/accessories, and dealership service visits. I surmised that GM may need a bigger carrot as a flipper can make three, four, or five times that amount by selling the car early. Well, today GM followed up that Carrot with the Stick and it’s not going to be pretty.
In a new email sent to GM dealers on Friday, Carlisle says, “When vehicles are quickly resold, particularly by unauthorized dealers or other resellers that do not adhere to GM’s standards, the customer experience suffers and GM’s brands are damaged.” To help slow down those flippers, GM will be limiting the transferability of the Z06’s warranty and will bar the flipper from being able to place “Sold Orders” on future GM vehicles if they sell their Z06s within the first 12 months of ownership.
Dealers will soon be receiving additional information about the customer acknowledgment requirements. We’ll follow up when we have more, but this is the move that GM had to take to stop non-enthusiasts from flipping their Z06s immediately after purchase. As the Z06 is such a different beast with its bespoke LT6 flat-plane crank V8 engine, are you willing to take the chance to buy a first-year model without that security blanket? We are betting a lot of people would say no.
Here is the new memo from Steve Carlisle below, and then let us know your thoughts in the comments.
Dear GM Dealership Team,
We are continuing to build momentum as we head into the second half of the year and have started shipments of several of our high demand and limited production products.
This letter serves as a follow-up to my communication from January of this year, where we reiterated your contractual requirements and our policies on selling new vehicles for resale. When vehicles are quickly resold, particularly by unauthorized dealers or other resellers that do not adhere to GM’s standards, the customer experience suffers and GM’s brands are damaged. As a result, on certain high demand enthusiast products, we are limiting the transferability of certain warranties and barring the seller from placing future sold orders or reservations for certain high demand models (as identified by GM) if the vehicle is resold within the first 12 months of ownership. These changes are being implemented to ensure an exemplary customer experience, to ensure our brands remain strong, and to help prioritize ownership by brand enthusiasts and loyal customers. These changes will not impact product recalls in any way.
Currently, the products impacted by these changes include the following: 23MY Cadillac Escalade-V, Chevrolet Corvette Z06, and GMC HUMMER EV (SUT and SUV). Certain warranties will not be transferrable if the original owner resells the vehicle within one year of delivery.
In the coming days, you will receive a message from your respective brands that will outline full details of the warranties and the customer acknowledgement requirements to implement this new process. Thank you in advance for continuing to do your part in ensuring our customers have great experiences when purchasing these truly special products.
If you have any questions or comments, please reach out to your Zone Manager.
Regards,
Steve Carlisle
President GM North America
Source:
General Motors
Related:
Shots Fired! GM North American President Steve Carlisle Warns Dealers Against Market Adjustments on Z06
GM Offering Z06 Buyers $5,000 in Rewards Points for Not Flipping Their Corvettes
Preliminary 2023 Corvette Z06 Orders Can Now Be Submitted
-
![[SPIED] Corvette ZR1 Mules Testing in Ohio Ahead of the NCM Bash](https://www.corvetteblogger.com/images/content/uploads/2024/04/042224_8-218x150.jpg "[SPIED] Corvette ZR1 Mules Testing in Ohio Ahead of the NCM Bash")
Excellent move by GM!! Just hope other manufacturers will follow suit with their specialty products that are flipper magnets…void those warranties.
Great idea. They must do something to separate the real customers from those only wishing to resell quickly for a profit. Hopefully, this will include dealers who put a few miles on the car and then sell it as a used vehicle at an inflated price.
Great move , I really think GM needs to do the same with all new corvettes . There are flippers on their second & third flip . The ones that are on the list have to wait forever that will keep and enjoy. I have been waiting sense 11/02/21 and still have 20 orders in front of me !
Some people will be happy and some (flippers), will be working the system to break the code… I applaud GM’s efforts to take actions to mitigate flippers who have no interest in enjoying the car…and block others from ordering. There’s no panacea, but this is a good start to help those that truly will drive and enjoy the Z06 without a flipper!!! GM can control allocations to dealerships that are applying ADMs, or similar…
An absolutely brilliant move that rewards those of us who love these cars and the passionate crew that have design and built them to be the amazing machines they are rather than those who simply look at them as a cash cow commodity to make a few quick bucks with. One of the best things about Corvette is the people who drive and appreciate these amazing machines and this move is one more example of the Corvette and GM team understanding their sincere fans and customers and looking out for them.
Sounds like another empty promise. They should have said straight up; if you sell it within a year the warranty is void and you’re banned from future sold orders. Done. And they should have made another threat; any dealer taking more than one of their allocations for themselves lose all future allocations for 5 years.
GM is putting down the hammer on buyers, but when it comes to dealers asking 20-30k over msrp; they are not pressing the issue? What gives?
Ironically they aren’t forcing anything on the dealerships. I do agree this is a right step for blocking flippers but let’s be real, it’s really the dealerships putting their much higher than MSRP prices on the cars, that reflect negatively towards the brand and The GM leadership
This wont stop anything. There will be so few cars and super long waits so people will buy them anyway.
no way to stop gambling , prostitution , dope , or flippers….. it is simple to pay someone to front the buy.. it is amusing to me , that someone ahead of ‘you’ on the list and buys a car is any of any of you guys business what they do with ‘Their’ car.
I’m in my seventies, who knows when it might have to be sold……for that matter what about one gets killed, loses their job, divorce………..or a number of reasons. Don’t think that can be enforced. This creates a bad image problem for them with their customers…Pick on dealers, not customers. (don’t forget about the GM bankruptcy that screwed a lot of people). This is a bad PR move
Thank you, Thank you, Thank you GM, I am glad you are taking on the issue of flipping. These scumbags are depriving a lot of people of their dream of owning a new Corvette. I know some will find work arounds, but you Guys get an “A” for effort. Great that GM looks out for there customers by addressing Greedy Dealer mark-ups and flippers making a quick buck. Proud to be a Corvette Owner.
I have already seen some of the YouTubers towing the GM company line on this. The same ones who said that dealers will lose their allocations if they sell over MSRP. The same ones who have been predicting all kinds of stuff that never happened or happened way after they said it was going to happen. The same ones who were way off on pricing. You know, the same ones who are in “the know.” There is lots of loose language in here, folks. So don’t get your hopes up and run crazy with one little piece of info and spread it like the gospel. But hey, even a broken clock is right twice a day. 🤔🤦🤡
I would certainly drive my Z06 for a year for free. As long as the demand is there a 12 month old Z will be worth a lot more.
This whole thing is silly. First of all, the entire dealership automotive sales model is completely antiquated. The fact that you have to pay some middle man in order to complete a retail purchase is asinine in today’s internet world. I can buy a $200,000 Rolex online but not a Corvette?? What GM really should do is sell Corvette directly to the public online. Barring that, they should require renegotiation of every Chevrolet dealership franchise contract to require the dealerships to sell at MSRP. As far as flippers, that’s actually a GM problem. If the demand exceeds supply to the extent that a flipper can make three or four times original sales price, GM needs to ramp up their production line. And the idea of barring customers from purchasing future GM vehicles is not only absurd, but likely illegal under numerous public accommodation statutes.
Agree that direct sales is the way to go and capacity needs to support demand. The dealers are needed to service the vehicles. The problem is that the car companies invoice the dealers as soon as the car is produced and they count it as a sale for Wall Street. Another problem is that dealers are trained on a thing called the absorption factor. When I was closer to the industry is was 80%. Simply put, it meant that the service department should abort or pay for 80% os the entire dealership’s costs. Those costs are the big showroom, all the new car inventory, advertising and more. If the new car operation had to pay all of its costs, it would lose a ton of money. Selling direct would st least reduce the cost of carrying the new car inventory.
Earlier this year I purchased a new Tesla Model 3 through their Tesla phone app and never once spoke with a salesperson or representative. The only dealership interaction was while taking delivery. Any future interaction e.g., warranty claims…and depending on the issue, would be coordinated via the Tesla phone app to schedule an appointment with a Tesla Tech to come to the house or Tesla maintenance facility. EASY-PEASY!!!
GM, FORD and the others should consider this methodology…the price is the price, no ADM, and no salesperson up-selling. As a first time Tesla buyer vs. dozens of conventional dealership purchases, the Tesla method is mow much preferred. If I’d needed to drive or preview a Tesla the dealership’s can and will accommodate. However, I’d estimate that ~95% plus buyers purchasing a Z06 will never have seen, sat in, or driven one. Why not be able to buy it via a phone app or through a well trained GM online representative on a zoom call that can discuss options and alternatives based on your particular needs. Not all, but a majority of Chevrolet dealerships selling the Z06 are ill-prepared or trained to sell this car. I base this on my 30 plus years of buying Corvettes from various local Chevrolet Dealerships. For the past 5 years I now use a nationally known Chevrolet Dealership who I trust and btw sells hundreds… Although, I might be missing something…
Most car buyers these days know far more about the product than any salesman at any dealership because the information is out there and the consumers have done their homework. The conventional dealership model is broken and needs to be changed to a Tesla equivalent or something like this…a small sales office with a couple of salesmen and one demo of each model. You come in and drive it, then order the color and trim level of your choice. Car comes in and you pay MSRP. You sell your car yourself or to a CarMax equivalent and the new car dealerships are out of the used car business. The bulk of the dealership is the service department where warranty work is done. No more extra inventory on new car lots, no more 10k sq ft fancy showrooms, and no more extra salesmen standing around eating donuts and circling the parking lots like sharks. Party is over.
Totally agree ^^^
Make the car and send it to the dealer. Who cares if it’s flipped for 500k. Let the market work it out.
I don’t know that this solves anything.
The only people who are going to be buying the Z06 flipped are people who have more money than they can spend. These are the same people who will buy it at stupid dealership markups, like the $50K markup and $5K down that Stonebriar Chevrolet in Frisco, TX told me they will charge in 2021 (no lie).
The real issue is not flipping cars, as these people are legitimately in line to buy, just like you or I. The “problem” is limited supply, high demand, and dealers who mark it up to get what they can off of the sale.
While I don’t like the whole markup and flipping thing, the fact is the car is going to be in high demand compared to supply, and that means people with money will pay to jump in line, whether by paying extra to a dealer or extra to a flipper. I find it difficult to say that a dealership shouldn’t sell for what (morons) are willing to pay. It’s economics.
The warranty change may reduce the desirability to some, but not all, because it is ultimately just another price increase (in the guise of maintenance risk).
And there you have the other thing that GM did to reduce the impact of supply problems, which, in this regard, seems to have escaped most people’s notice… they made the base price $106K.
I applaud GM for taking A necessary step to try and stop the insanity but we know this isn’t enough for what the DEALERSHIPS are doing by there crazy markups on all the Corvettes. As we can see this selling model seems obsolete to prevent what is going on. Hopefully something can be done soon to allow the average person to purchase the Corvette as it was meant to be as this price gouging has stopped me from buying the car that I’ve fell in love with and will NEVER pay the prices the dealerships are currently asking.
My childhood friend owns two Ford dealerships his grand father started. Dealership pays for every kids college across the many family members, multi generations and family members live in big beautiful homes, vacation in the best of style and locations, drive news trucks and cars…bottom line, I’ve never seen a struggling car dealer!
He says business has never been better than this last two years thanks to the Chinese virus. People are paying way above msrp on any car he can get on his lot. No inventory to hold, no negotiation, big profits…he loves low supply, big demand.
I can’t believe my GM dealer tacks on 10% ADM over sticker to cars and trucks. That’s an extra $7400 on a zL1! Dealers are the plague here, sucking what they can from their customers. Well, I’m done with dealerships and will buy used. GM makes a low quality vehicle and I’ve had enough of my pos 19 Silverado.
Comments are closed.