Earlier this month, we reported Ford’s corporate offices had warned its dealers against demanding extra deposits or other payments on reservations for hotly anticipated vehicles like the upcoming F-150 Lightning. Now comes word GM sent a similar letter to its Chevrolet, GMC, Buick, and Cadillac dealers around the same time.
Originally posted to Corvette Action Center and attributed to GM North America president Steve Carlisle, the letter has since been confirmed by GM as authentic. In it, Carlisle notes most dealers are playing fair, but says “a small number of dealers have engaged in practices that do not support a positive sales experience for our customers.”
Carlisle specifically calls out dealers demanding extra money beyond the cost of a reservation and or adding huge markups to the final vehicle cost. Known as “market adjustments” or Additional Dealer Markups” (ADMs), these surcharges are added to the price of the reservation and or the final price of the vehicle by the dealers and are pure profit.
At the root of it are simple laws of supply and demand, exacerbated by plain old greed. These vehicles are highly anticipated and have either limited reservation slots available or long waiting lists. Dealers charge markups because, simply put, people are excited enough about the vehicles to pay whatever it takes. In some cases, this can mean tens of thousands of dollars or more above the Manufacturer’s Suggested Retail Price (MSRP).