GM to penalize consumers who resell certain high-demand vehicles within 12 months

DETROIT — General Motors is asking dealers to help prevent customers from quickly flipping high-demand vehicles and adding exorbitant markups.

The automaker is barring customers who resell certain high-demand vehicles within 12 months from placing future reservations and orders. GM also is limiting the transfer of certain warranties.

Steve Carlisle, president of GM North America, outlined the change in a letter sent to dealers Friday. For now, GM considers the 2023 Cadillac Escalade-V, Chevrolet Corvette Z06 and GMC Hummer EV pickup and SUV "high demand" models that the requirement would affect.

Industrywide, dealers and consumers have been charging hefty prices for vehicles, dubbed "market adjustments" by dealers, as inventory remains scarce. GM and other automakers have urged their dealership networks to sell and price vehicles fairly.

"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," Carlisle said in the letter. "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."

Dealers will receive a message from their respective brands this week detailing the warranty transfer limitations and customer acknowledgment requirements, the letter said.

Carlisle in January sent dealers a letter encouraging fair sales practices after a small number had been demanding extra reservation fees, making unauthorized deals with brokers and charging customers prices much higher than the sticker.