Dealer markups continue to run rampant. While some dealers are still raking in the cash with those hefty price markups, the internet and general population have managed to step in and back dealers against the wall, forcing them to price things fairly more. It happened to one dealer, that decided to capitalize on its Corvette Zo6 allotments by auctioning off a slot to own one. And the internet rightfully turned on that dealer and stopped the nonsense in its tracks.
Road & Track reports that a few Chevy dealers were taking part in the practice of auctioning off Corvette Z06 allocations to the highest bidder. The latest markup scam-like action was first noticed on the Corvette Forums. In a thread posted by user ElFingers, the commenter shares they were recently contacted by the local dealer they had a Z06 deposit with. The call was to inform him that the dealer only had one Z06 allocation, and they were going to auction it off.
ElFingers says there were no further details about the auction at the time of the call — the manager said he was waiting on more information from the dealer owner. But, what they did know was that they were expecting someone to drop $75,000 over sticker for the chance to be the first to own a Z06 in addition to the auction. From the forum.
I got a call from my dealer (Classic Houston) and the news wasn’t good at all. They have one allocation in the current cycle that will go for $75k over MSRP. I think they’re hitting up the folks on the waitlist with deposits for the opportunity to purchase at this insane markup. The reasoning I received was it was “…customers fault…” because the flipping going on with the C8 Stingray, and the insane ADM those vehicles have garnered, created a bubble that has now manifested itself onto the Z06; and, of course, supply chain issues, material constraints, etc… Uhm…ok. Mind you, I am #5 on what was supposed to be an @ MSRP list (for over 2 years; with $2k deposit). The next thing that will happen is the next 3 or so allocations the dealer may get will “…go to auction…”. Presumably on EBAY or by pitting folks on the list against each other via a bidding war? I really don’t know how this will work and the dealer Corvette focal point was not sure himself until the owner(s) give him some clarity. Subsequent to that round, then they will go down the list, starting from the top, and offer allocations to folks based on what the market is sustaining with regard to ADM at the moment customers are contacted.
Classic Chevrolet Houston was not alone. Friend of the site Zerin Dube posted a tweet with an email from another dealer, Classic Chevy Sugarland that explicitly stated that an for the Z06 was what was going to happen.
What’s worse is the wording in bold: “The amount of your bid will not be the final purchase price for the vehicle.” So, to recap this money grab, these dealers will get your money from the bid you placed just for a spot in line. If you win, the amount you bid doesn’t go towards the purchase price of the car at all. Instead, it is for a spot in line. On top of that, they want you to swallow the markup they’re going to hit the car with once it hits the dealer. If this were any other industry, something like this would most likely be illegal or garner a class action suit.
This all gets more interesting when you consider that GM asked dealers to stop putting absurd vehicle markups on their cars. In early 2022, GM President of North America Steve Carlisle sent out a letter to dealers that outlined three key things that they shouldn’t do with sales of the new Z06: Forcing customers to pay more than the $1,000 reservation fee GM had set; no direct selling to brokers; and no markups. He called these things “harmful to the reputation of Dealer, General Motors, or its products” and “puts our collective interests at risk and generates negative press that reflects poorly on GM’s brands and your dealership.” But a letter and a simple ask have done nothing to curb this behavior, which is why its still happening.
While GM is being light-handed with dealers due to franchise laws, the internet decided to take a stand.
A letter that was received by a customer and posted on the Corvette forums from Mac Haik Chevrolet shows the dealer attempting a more straightforward approach to the ever-absurd markups. This letter, has some of the wildest stipulations for a sale I’ve ever seen from a dealer. Emphasis Mac Haik Chevrolet:
“In order to place a 2023 Corvette Z06 Sold Delivery Order, Mac Haik Chevrolet requires a $6,000 non-refundable deposit from the customer once your order is accepted by Chevrolet. In the event that the customer does not take delivery, this fee will be utilized for resticking, marketing & merchandising of said Corvette to the general public.
Upon delivery of the 2023 Corvette to the customer, the $6,000 will be applied as a down payment. Vehicle will be sold for $90,000 Over MSRP.
Insanity. The letter quickly made the rounds on social media and the dealer got dragged. Some people vowed to not buy any car from the dealer. Others wondered how and why GM would put up with something like this. It continued to escalate when someone found the identity of the dealer’s GM. He must have been blasted with messages because not long after, this message was shown:
Another screenshot of a message from the dealer went out on Twitter showing that the dealer was going to sell the cars at MSRP and the GM saying again that they “didn’t want to cause any problems”:
This should be a lesson to any and all dealers that are taking advantage of the market right now. While there are still people out there who will gladly pay these insane markups just to be the first to have something, most of us just won’t stand for this type of greedy behavior anymore. It just goes to show that the right thing can be done when people come together.
Note: I contacted Classic Chevrolet of Sugarland to get more information regarding the auction of the Z06 and to see if they were still going forward with it. They have not yet responded, but I will update this post when and if they do.