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  • Writer's pictureRGS Eric

General Motors Terminates Vehicle’s Warranty to Combat Corvette, Hummer, and Escalade V Flippers

Are you on the hunt for a Corvette, Hummer, an Escalade V, or might know someone who is planning to buy one soon? Read this to understand how you may be affected by the new warranty condition that General Motors will impose soon to combat flippers and prioritize true brand enthusiasts and loyal customers.

Automakers had to deal with numerous acts that hurt their brand and reputation through negative customer experiences, from dealers unreasonably jacking up prices to unauthorized dealers and buyers reselling high-demand car models within a few months from the initial purchase. These practices hurt the brand and the customer experience, as they do not adhere to the automaker’s standards. A couple of ways that automakers deal with these practices and ensure that their brand is being represented favorably is condemning greedy dealers and adding stipulations stating that certain car models can’t be resold for a certain period after the initial purchase.

Recently, however, in a very bold move by General Motors, the well-loved car maker announced that they plan to revoke the warranty coverage of certain high-demand and limited-production models that are traded in within the first year of ownership. Spotted on Twitter, a letter sent to GM dealers from the president of General Motors North America, Steve Carlisle, addressed the issue of vehicle flipping. A number of well-known cars, including the Hummer EV, have already been seen changing hands for sums that are significantly higher than their Manufacturer’s Suggested Retail Price (MSRP). For example, a unit was sold for $275,000 in April, and according to GM, such behavior can harm the brand.

In response to the issue the letter stated, “we are limiting the transferability of certain warranties and barring the seller from placing future sold orders or reservations for certain high-demand models.” This move does not only affect the warranty, but also aims to prohibit flippers from purchasing products in the future. The products that are currently affected by the planned changes are listed in the letter as well: 23MY Cadillac Escalade-V, Chevrolet Corvette Z06, and GMC HUMMER EV. The use of the term “currently” in the list of models leads us to believe that General Motors might extend this condition to future models if proven successful. GM Dealers can expect further information from their brands soon that will outline the details of the new restrictions and requirements to secure customer acknowledgement to start the implementation of the new process.

This is a daring move from General Motors and we seriously hope it will make positive changes in fighting off flippers and keeping brand enthusiasts happy and loyal. With a long waiting time for products to be available, brand enthusiasts deserve to be prioritized.

As a brand enthusiast, are you happy with this initiative from General Motors? Do you think this will really help curb flippers and prioritize brand enthusiasts? Do you think other automakers should follow suit? We’d love to hear your thoughts, comment it down below.

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