It wasn't even two weeks ago that Ford's VP of sales for the U.S. and Canada decided he needed to tell the dealer body to stop squeezing 2022 F-150 Lightning buyers for more reservation money. The shenanigans risk alienating the very important new customers of a very important new truck. Corvette Action Center reports that now Steve Carlisle, General Motors' president for North America, has done the same thing with the Chevrolet dealer body to stop the same kinds of antics happening with the 2023 Corvette Z06. The problem according to Carlisle is "a small number of Dealers [that] have engaged in practices that do not support a positive sales experience for our customers." Those dealers who don't end such practices will risk losing their Z06 allotments.
The letter identifies three unwelcome tactics. The first is dealers insisting customers pay more than the $1,000 reservation fee that GM set for the Z06. This problem is already years old, with some dealers opening up their own reservations lists in 2019, more than two years before GM announced the car. While some dealers only took $1,000 for a reservation, a dealer in New Hampshire claimed to have more than 1,300 potential buyers who had put down $2,000.
The second game Carlisle wants to take down is the dreaded market adjustment, dealers having "requested customers to pay sums far in excess of MSRP in order to purchase or lease a vehicle." We're not sure what recourse GM has against this. We're sure Ford isn't happy about F-150 Lightning markups, either, but Ford specified in its letter that it wouldn't tolerate gaming the reservation system as opposed to ADMs. Carlisle insists that these methods can be "harmful to the reputation of Dealer, General Motors, or its Products," and "puts our collective interests at risk and generates negative press that reflect poorly GM's brands and your dealership."
The third offense is dealers reselling vehicles to brokers; having a broker volunteer fat sums over MSRP is an easy way for a dealer to sidestep having to ask for more money. Carlisle notes that this practice is explicitly outlawed in the dealer's sales and service agreement with GM.
It will be interesting to see how dealers respond. With the prodigious sums on offer, we expect some dealers will continue to explore where the line is and whether it can be nudged further into the black. Surcharges have been around as long as there have been more buyers than product, and in a market where a dealer feels justified asking a $38,000 ADM on a regular 2022 Corvette — which GM hasn't said anything about, remember — stopping all of these practices could be a mighty challenge. GM has to put up a fight, though. Just like Ford, it has additional, crucial new products arriving soon that are trying to attract crucial new audiences, and it needs to be seen doing its best to provide the best experience.