General Motors to void warranties on hot cars and trucks that get flipped
Warranties will be non-transferable if the vehicles are quickly resold
Inside the 2022 GMC Hummer EV
Fox News Autos Editor Gary Gastelu provides insight into the 2022 GMC Hummer EV and its features.
General Motors is initiating a new program to stop its hottest models from getting flipped for sky-high prices.
In-demand, low-volume vehicles like the GMC Hummer EV have been getting resold for astonishing amounts as supply comes nowhere near satisfying demand.
The initial Hummer EV model available this year has a starting price of $112,595, but several barely driven examples have been auctioned for over $250,000, with one commanding $324,500 at a recent event.
The automaker will soon be launching the high-performance $106,395 Chevrolet Corvette Z06 and $149,990 Cadillac Escalade-V and wants to get out front of the issue.
The Escalade-V is the most powerful and expensive vehicle Cadillac has sold to date. (Cadillac / Fox News)
GM North America President Steve Carlisle has sent a letter to dealers informing them that the transfer of certain warranties will be voided if the vehicles are resold by the buyer within 12 months of delivery.
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"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," the letter says.
The Chevrolet Corvette Z06 is a new high-performance version of the sports car. (Chevrolet / Fox News)
Carlisle adds that dealers will also be restricted from placing orders and reservations on "certain high demand models" in the future.
GMC only delivered 371 Hummer EV pickups through June as production ramps up. (Emily Elconin/Bloomberg via Getty Images / Getty Images)
Due to the patchwork of state dealer franchise laws, legacy automakers are largely prevented from mandating how much dealers charge for their products, while new brands like Tesla that sell their vehicles directly are entirely in control of pricing. However, GM's franchise agreements do include general "best interest" provisions, according to Autoblog.
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A GM spokesman told FOX Business that the bumper-to-bumper, powertrain/electric vehicle propulsion, sheet metal, tire and accessory coverages will be voided on all three models, but clarified that the Hummer EVs battery warranty will remain intact.
GM will also continue to cover any required recall work on all the vehicles.
The National Automobile Dealers Association did not immediately respond to a request for comment on the policy.
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GM is also attempting to address this problem on the customer side by offering buyers of the Corvette Z06 $5,000 worth of MyChevrolet rewards points, which can be used to pay for things like accessories and service, if they hold on to the car for at least a year.