General Motors shocked people when it announced that it would try to stop flippers from making money on the highly sought-after Chevrolet Corvette Z06. The automaker will be coming down hard on flippers by limiting what warranties will carry over with the vehicle and barring sellers from placing future orders for high-demand vehicles. While GM is setting its foot down with consumers for trying to make a quick buck, shoppers looking to purchase a Z06 will have a hard time getting one, as dealers are allowed to markup models as they see fit. Reports of one dealer in Texas auctioning off the allocation to get a Z06 have surfaced, highlighting just how far some dealers are going to get extra money for the American supercar.
As Road & Track reports, a forum user on Corvette Forum found Classic Chevrolet Sugarland in Texas was auctioning off the allocation for a Chevrolet Corvette Z06. An allocation just refers to the fact that the dealership is getting a Z06 in the future. Any bids for the allocation go directly to the dealership and not to the vehicle itself. Forcing consumers to bid on the opportunity to purchase a Z06 is a gross way to essentially come up with an innovative way to markup a vehicle.
Twitter user Zerin Dube shared a screenshot of a document that outlines how Classic Chevrolet Sugarland will be handling the auction. The language used in the documents doesn’t rule out the possibility of an additional markup on the car. In addition to the regular fees that consumers have to pay when they purchase a new vehicle from a dealership, Classic Chevrolet Sugarland claims that the winner of the auction will have to fork over funds for “MSRP adjustments.”
Road & Track managed to track down Classic Chevrolet Sugarland’s CTO John Rodkey for a comment who stated that the auction wasn’t a way for the dealership to net some extra money. The auction was supposedly a way to raise money to benefit charities in the dealership's community. In the original screenshot of the paperwork from the Twitter post, the dealership claims that it will be giving “a portion of the net proceeds of the auction” to a few charities.
Whether it was because of fierce backlash that the dealership received from the Internet or if GM intervened – we highly doubt it – Classic Chevrolet Sugarland eventually donated the entire $71,000 winning bid to six charities: Let’s Shine, Houston Area Parkinson Society, The Rose Breast Center of Excellence, Shriners Hospitals for Children, Champions Kids Camp, and the Houston Food Bank. So, something good did eventually come of the whole fiasco.
Unfortunately, this isn't the first case of a dealership auctioning off an allocation for a Z06. Jalopnik reports that Corvette Forum member ElFingers was contacted by Classic Houston because of a similar situation. The member has a deposit down for a Z06 with the dealership, so it wasn’t out of the blue. Classic Houston contacted the member to let him know that they only had one Z06 allocation and that they were planning to auction it away. Sound familiar? Classic Houston was reportedly expecting to receive $75,000 just for the chance to purchase a car. It’s an outrageous concept for dealers to auction off allocations, especially to consumers like ElFingers who have been waiting to purchase a Z06 for over two years and originally put a $2,000 deposit down.
As Jalopnik points out, the automotive industry is the only one where this kind of behavior is acceptable. It should be illegal, but dealerships are allowed to get away with everything. It’s surprising to see dealers be this bold with the Z06 after GM President of North America Steve Carlisle sent out a letter to dealers warning them of behaviors that could harm GM’s reputation. Clearly, dealers read the letter, crumpled it up, and threw it away, because this shouldn’t be happening.
With GM coming down harder on flippers than dealerships, shoppers looking to purchase a Z06 can expect this kind of behavior to continue. Jalopnik has a story from the Corvette Forum about Mac Haik Chevrolet requiring a $6,000 non-refundable deposit for the Z06 on top of a $90,000 markup. After getting hounded on social media for its decision, the General Manager of the dealership decided to announce that it would be selling the Z06 at MSRP.
It's a sad day when Internet sleuths have to stand up for shoppers instead of automakers. This looks terrible for GM, which hasn’t done much to curb dealers from marking up all versions of the Corvette. Instead of the situation getting better, it looks like things are getting worse with dealers becoming more innovative on how to get shoppers to pay over MSRP for a vehicle.