GM Will Cancel Your Z06 Warranty If . . .

Automakers are trying everything they can to combat rampant flipping and reselling of high-demand models. Now, General Motors is taking the fight to those who decide to buy their popular car from a flipper. In a letter sent to dealers signed by Steve Carlisle, president of GM North America, the automaker says "certain warranties will not be transferrable" on Corvette Z06, Escalade-V, or GMC Hummer EV models that are re-sold less than one year after original sale.

The letter was first spotted on social media (thanks, Zerin!). Jalopnik contacted a General Motors spokesperson, who provided the full text of the letter (which you can read below) and confirmed that the letter was sent to U.S. dealers.

The long and short of it is this: GM is "limiting the transferability of certain warranties" on those three models "if the vehicle is resold within the first 12 months of ownership." The automaker says it's pursuing this action because "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 also points out that "these changes will not impact product recalls in any way," and says the action will "help prioritize ownership by brand enthusiasts and loyal customers."

A GM spokesperson gave the following details to Jalopnik:
For Corvette Z06 and Escalade-V, if ownership of the vehicle is transferred from the original owner within the first 12 months of delivery, the Bumper-to-Bumper, Powertrain, Sheet Metal, Tire and Accessory coverages will be voided.

Flipping, brokering and reselling are a major issue with seemingly every high-demand enthusiast model on the market today. Automakers have limited opportunities to combat this practice, in large part because of how U.S. new-car sales work: Independently-owned dealerships are the customers who buy the cars wholesale from the automakers, then sell them at retail to customers.

Since the automakers don't control the dealers, there's little an OEM can do to prevent a dealership from adding markup to a car, or playing games with selling a hot new vehicle as "used" for whatever price the market will bear. And even a dealer can't control what an individual customer decides to do with their car, including flipping it for a profit the moment the dealership sale goes through.

Of course, the person penalized the most by GM's new policy is the buyer who gets the car from a flipper or broker. That buyer might not even know about GM's warranty policy until they need to bring their Z06, Escalade-V or Hummer in for warranty work, only to find their warranty has been denied. Jalopnik has reached out to GM for clarification on which warranty coverage is affected by this policy, and whether the automaker plans to publicize this new decision to make sure potential private-market customers know what they're getting into.

A GM representative gave the following explanation to Jalopnik:
The person who attempts to flip one of these high demand vehicles by selling it during their first year of ownership is prohibited from placing future sold orders for certain high demand products (identified by GM). So there is significant risk to the flipper's future ability to buy, in addition to providing an incentive for a customer to buy new and receive a warranty rather than buy from a flipper.

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Source: Bob Sorokanich - Jalopnik

Posted 8/12/22