UPDATE: The customer and the dealer have worked together to find a solution, allowing for the customer to take delivery. Please read this update before reading the article below.
Click Here To Read About The Resolution
Just when you thought surprise last-minute “at the table” GMC HUMMER EV markups and shenanigans couldn’t get any worse, a dealer in Fayetteville, Arkansas has taken it to a whole new level. It has us wondering if this is just the new normal when it comes to GMC’s flagship electric super truck.
This story started with a simple post on the GM-Trucks.com HUMMER EV Facebook Group that caught our attention. We reached out to the customer.
HUMMER EV #210 Arrives At The Dealership
The reservation & order holder for GMC HUMMER EV #210 is currently dealing with a problem that we’ve never heard of before. We’ll call him “A”. After placing an Edition 1 reservation in October 2020, patiently waiting over a year, and getting a promise that his dealer wouldn’t charge him more than MSRP, “A” sat down with his GMC HUMMER EV dealer last week to finalize all of the paperwork so he could drive his new HUMMER pickup home a few days later. That’s when things went south out of the blue.
For “A”, It was supposed to be a happy day. After waiting almost a year and a half for the most awesome product GMC has ever sold, wouldn’t you be excited to take delivery of your $112,000 electric Super Truck that has 1,000-horsepower and can go 0-60 in 3.5 seconds? “A” certainly was and even more so after he got word that his new HUMMER EV had arrived at his GMC dealer was ready to be delivered. The plan was to visit the dealership a week before delivery to sign the paperwork and then return a few days later to drive his super truck home.
After arriving, “A” sat down and started signing the paperwork. During the process his sales associate handed him a non-standard looking “agreement. His sales associate said it was a “standard dealer form”. Turns out, that was not necessarily the truth.
Inside the pile of papers was a “Right of First Refusal & Security Agreement.” It proposed that after signing, “A” as the owner of HUMMER EV #210 would have no legal right to sell or transfer said HUMMER EV to anyone but “Superior Buick GMC”, at MSRP, for TWO YEARS. Even weirder, the dealer would put a lien on the HUMMER to make sure that was the case as well. It also spelled out potential damages as the surplus of the vehicle’s value minus the MSRP.
“A” balked, refusing to sign the agreement and demanded the manager explain what was going on. “The manager put the owner of the dealership on the phone, who explained that other copies of the HUMMER EV were being sold via auction for north of $200k and they were not going to give up that potential profit”, said “A”. “I asked what we needed to do to take the Right Of First Refusal out of the contract and the owner said they needed $100-thousand over MSRP”.
So “A” walked, stating he would still buy the vehicle and that he considered HUMMER EV #210 to be his, but that he needed time to process the dealer’s demands.
Management Demands The Customer Sign But Then Pulls The Plug
The next day when “A” asked via email for another copy of the contract to review. Shortly thereafter the dealer called him stating they “intend to keep the vehicle for themselves”.
Photos of HUMMER #210 were posted to the dealer’s facebook page shortly thereafter and comments by the dealer account made it seem the vehicle was for sale.
Refusing to sell a customer a HUMMER EV ordered through the reservation process is most likely running afoul of the GMC reservation contract, however asking more than MSRP is not.
However, while the reservation contract doesn’t exactly spell out what recourse a customer has when a dealer attempts to make a them sign away their right to re-sell their own vehicle for two whole years, a recent letter to all General Motors Dealers shines more light on situations potentially like this.
This letter from the President of GM North America, Steve Carlisle, reminds dealers they have already agreed to “effectively, ethically, and lawfully sell and promote the purchase, lease and use of Products by consumers.” by being bound to a GM Dealer Agreement. It also mentions that Dealers selling to brokers or auction houses is another action that runs outside their Dealership Agreement.
Concerns For All HUMMER EV Reservation Holders
If a dealer can attach demands to a HUMMER EV sale as a poison pill and then shop the truck around to get the highest price after scaring the reservation holder away, the entire reservation system is pointless. The implied benefit of reserving an Edition 1 HUMMER EV was the exclusivity was determined by the reservation system and how quickly one could register their interest, not by how much of a markup a dealer would attempt to apply.
In the face of all of this, “A” plans on retaining representation should the dealer not reconsider their proposal. “I have nothing to lose in this deal and have the financial ability to fight them just for fun. If it prevents it from happening again, I’m all for it”, states “A”
Meanwhile, other dealerships are reaching out to “A” and other HUMMER EV reservation holders- offering to transfer their reservation to their own dealership with no added markup or agreements. One is even offering a free flight and $1,000 in accessories for anyone who transfers their reservation. It’s not clear if these dealers would also ask for a “Right Of First Refusal” as well.
While it’s too late for “A” (once a HUMMER EV is shipped, it cannot be transferred), anyone else who has a HUMMER EV order should get assurances from their delivering dealer or transfer their order to a dealer who promises not to sell with a markup.
The GMC Dealer’s Response
I reached out to the dealership and have yet to receive any response from management.
I reached out to GMC about this story and they responded with two statements.
“We are looking into this specific case. We do not support sales practices or brokering activities that undermine the integrity that customers expect from the GMC brand.” – Chad Lyons, GMC Communications
“To protect the privacy of all involved, we are not providing specific details on this situation. We encourage both independent parties to resolve this issue in a positive manner.” – Mikhael Farah, GMC Communications
Other GMC Dealer Responses
After publishing this article GM-Trucks.com was contacted by two different GMC dealers explaining why this “No resale” policy may have been implemented. Both dealer employees expressed that multiple vehicles at their dealerships have recently been sold to customers at MSRP and quickly resold for a profit by customers who had no intention of owning them.
One dealer from Michigan has had all three GMC HUMMER EV deliveries that they’ve sold at sticker flipped immediately. The other has not yet taken delivery of a HUMMER EV but has had a Cadillac Escalade and one other vehicle immediately flipped.
From a business perspective, this could shine more light on why dealers may get extra-protective of their “selling at sticker” goodwill during a tough industry period.