GM Will Drop Certain Warranties for the Z06 if It’s Sold Within a Year

Flippers will also be banned from ordering any future GM products.

byNico DeMattiaJul 31, 2022 6:06 PM
GM Will Drop Certain Warranties for the Z06 if It’s Sold Within a Year
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Earlier in the week, it was reported that GM was trying to reduce the amount of flippers buying and selling certain cars, such as the upcoming Corvette Z06. GM had sent out emails to Z06 order holders, offering them $5,000 worth of rewards points if they keep their cars for at least one year. However, GM is taking even further action to prevent people from flipping its high-demand cars.

A GM spokesperson told The Drive, for certain high-demand 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." Those high-demand products are the Corvette Z06, the Cadillac Escalade-V, and the GMC Hummer EV.

So if someone flips a Z06, or any other high-demand GM vehicle, the flipper won't be allowed to place any orders on any future GM products. It also isn't great for the second buyer of the car, who will not only pay above MSRP to the flipper but will find out the hard way that it doesn't actually come with much of a warranty. Though, I guess that's what you get when you encourage car flipping.

2023 Cadillac Escalade-V | Cadillac

GM’s North America President Steve Carlisle sent out a letter to dealers on Friday, alerting them of the new policy. Carlisle told dealers back in January that when a high-demand vehicle is bought and sold so quickly, especially when it's sold to an unauthorized dealer, it not only hurts the customer but the brand. He also reminded dealers of their contractual requirements and GM's policies on selling new cars for resale.

A GM spokesperson also told The Drive: "This will help prioritize ownership by our top brand enthusiasts and most loyal customers."

Car flipping isn't a uniquely GM problem. It's becoming increasingly popular among all high-dollar, low-allocation cars. Deep-pocketed flippers buy up early allocations and take advantage of both the high-demand and low supply to flip their cars for big profits. Policies like the ones GM is implementing could reduce such flipping, as there are real penalties for both the flipper and the buyer. However, will flippers really be deterred by such penalties if they can potentially make tens of thousands of dollars, even if they can only get away with it once? I guess we'll have to wait and see when Z06 customers start taking deliveries of their cars.