The GMC Hummer electric SUV, Chevy Corvette Z06 high-performance car, and Cadillac Escalade-V high-performance SUV will be hard to find. Scarce things fetch high prices. But General Motors knows that high prices for its products give the automaker a bad name.
So GM has a plan. The company is cracking down on flippers, brokers, and the dealerships that work with them. But the plan could leave unwitting buyers with un-warrantied cars. So if you’re in the market for one of those hard-to-find models, read on.
What are Flippers and Brokers?
When a car is rare and desirable, some people will pay well over the manufacturer’s asking price for it.
Car flippers are people who know that and arrange to buy one and resell it quickly for a significant markup. 
Car brokers are legitimate businesses that can be tempted into flipping. You hire a car broker when you want a specific car and don’t have the time or energy to hunt one down and negotiate for it. A good broker will charge a small percentage of the sale price to search the country for the specific model, color, and feature combination you want and arrange to deliver it.
However, when market conditions are as extreme as they are today, sometimes dealers and brokers work together to arrange to flip cars. Shady dealerships occasionally work with brokers to sell rare cars for well over their asking price and split the profit.
It’s not illegal. But, if you’re GM, it creates a public relations problem. Shoppers see the 2023 Corvette Z06 advertised with a $105,000 asking price (plus $1,395 destination fee) and are shocked to find them selling for as much as double that price. They get angry, naturally, at the company whose logo is on the car.
But GM doesn’t sell its own cars to shoppers and doesn’t set its own prices. With the exception of a few young automakers like Tesla, most car companies don’t sell cars directly. They sell to dealerships who set the actual prices.
That’s why the advertised price is the manufacturer’s suggested retail price. All they can do is suggest. The dealer negotiates the deal.
What is GM Doing About Them?
That doesn’t mean that GM is powerless to stop flippers or dealerships who work with them.
In a new letter sent to dealerships last Friday, GM explains, “on certain high demand enthusiast products, we are limiting the transferability of certain warranties and barring the seller from placing future sold orders or reservations…if the vehicle is resold within the first 12 months of ownership.”
The letter specifically names the Corvette Z06, Escalade-V, and Hummer SUV. With all three models, the new buyer may lose the warranties if a broker or flipper buys it and resells it within a year — and the reseller may lose the right to buy a GM car.
That punishes the flipper but also punishes the buyer. So buyer beware.
In its letter, GM tells dealerships the move is necessary because, with high reseller prices, “the customer experience suffers and GM’s brands are damaged.”
An Ongoing Fight Between Car Builders and Car Sellers
GM is one of several automakers cracking down on resales. Last week, Ford announced its own punishments for dealers who work with resellers.
Both companies had previously cautioned dealers against marking up vehicles themselves, as have Hyundai and Subaru. Nissan, meanwhile, has worked to force dealers to honor lease buyback agreements.
Those steps fit in with a general backlash against high car prices. The federal government has recently proposed new rules governing how dealerships advertise and negotiate prices. Some buyers have started their own resistance, crowdsourcing a list of dealerships that add hefty markups to new car prices.
