General Motors is launching a new program to keep its hottest models from flipping at exorbitant prices.
In-demand, low-volume vehicles like the GMC Hummer EV have been resold for astonishing amounts as supply falls far short of demand.
The first Hummer EV model available this year has a starting price of $112,595, but several barely driven examples have been auctioned off for upwards of $250,000, including one commanding $324,500 at a recent event.
The automaker will soon launch the high-performance Chevrolet Corvette Z06 at $106,395 and $149,990 Cadillac Escalade-V and wants to get out of the front of the matter.
GM North America President Steve Carlisle has sent a letter to dealers advising them that the transfer of certain warranties will be void if the vehicles are resold by the buyer within 12 months of delivery.
“When vehicles are quickly resold, especially by unauthorized dealers or other resellers who do not meet GM standards, the customer experience suffers and GM’s brands are damaged,” the letter said.
Carlisle adds that dealers will also be barred from placing orders and reservations on “certain high-demand models” in the future.
Due to the patchwork of state dealer franchise laws, traditional automakers are largely barred from dictating the price dealers charge for their products, while new brands like Tesla that sell their vehicles directly are in full control. the costs. However, GM’s franchise agreements include general “best interest” provisions, according to Autoblog.
A GM’s spokesperson told FOX Business that bumper-to-bumper, EV powertrain/propulsion, sheet metal, tire and accessory coverage will be void on all three models, but clarified that Hummer EVs battery warranty will remain intact.
GM will also continue to cover any required recall work on all vehicles.
The National Automobile Dealers Association did not immediately respond to a request for comment on the policy.
GM is also trying to solve this problem on the customer side by offering Corvette Z06 buyers $5,000 worth of MyChevrolet rewards points, which can be used to pay for things like accessories and service, if they keep the car for at least a year.