GM Offering Price Protection On Most Models

By

Automotive Contributor

Cristyn is a member of CarsDirect's Socal-based team of pricing and incentive experts helping uncover must-know insights for car shoppers. A native of Bakersfield, California, Cristyn has a degree in Liberal Arts from Santa Monica College, with over 10 years of experience in the areas of research and data analysis.


, Automotive Contributor - April 29, 2022

You may have noticed that dealer lots aren’t stocked with as many cars as they used to be. Production delays and demand are getting worse and new car incentives are quickly disappearing. Dealer stock hasn’t really improved in any significant way, either. Fortunately, GM is offering a price protection program for shoppers.

Here's a look at how GM's price protection incentive works, how it compares with price protection programs from competing car brands, and whether or not it could be worth taking advantage of in an effort to shield car buyers from the inevitable price increases on their favorite car or truck.

How Does GM Price Protection Work?

Typically, vehicles will go through periodic price increases throughout the model year. Mainstream brands didn't usually see price increases in excess of 3%, which would often equate to a few hundred dollars up to about $1,000. But lately, some increases have exceeded 10% of MSRP resulting in markups of thousands of dollars.

Price Protection is a manufacturer's promise to honor the agreed-upon price of an eligible sold order in the event of a price increase, from the time the order is placed to delivery of the vehicle. This will generally be a credit, issued to a customer, in the amount of the difference between the new price and the price at the time of order.

According to a bulletin sent to dealers, GM's Price Protection policy covers brands Buick, Cadillac, Chevrolet, and GMC, and most of its 2021, 2022, and 2023 models are eligible — even performance cars like the Chevy Corvette — as well as some commercial fleet vehicles.

The production date, or build date, of the vehicle, must be on or after the effective date of the price increase. The dealer must submit the sold order to GM within one business day of the price increase. The vehicle must be delivered immediately to the customer who placed the order. That is, the name of the customer who ordered the vehicle must match the name of the customer who receives the vehicle.

Alternatively, GM offers Incentive Protection on 2021 and 2022 non-performance in-bound models that are financed at non-promotional rates. This program allows customers incentive support in the form of a credit if a promotional incentive is lower at delivery versus the time of retail order.

2022 GMC Terrain

Do Other Brands Offer Price Protection?

Not all automakers offer Price Protection. But with the current automotive market conditions, more and more manufacturers are dipping their toes into this practice. Here’s how some of GM’s competition compare.

FCA (Stellantis) offers Price Protection for the agreed-upon selling price at the time of order in the event of an increase in MSRP before the vehicle is delivered.

Ford makes Price Protection available for situations when a price change occurs from the time a customer's order is registered until the vehicle is invoiced. Separately, Ford offers a $1,000 Retail Order Bonus to encourage customers to place a factory order and wait for delivery.

Honda will honor contracts up to 10 days after rate expiration, provided the credit application was received by the captive lender on or before the rate expiration date.

Both FCA and Ford also offer Incentive Protection, which differs from Price Protection in that it allows a customer to take advantage of a promotional incentive that was valid at the time of the retail order but expired before the vehicle could be delivered.

2022 Jeep Wrangler Unlimited Rubicon

Is GM's Price Protection Worth It?

Current market conditions are poor, with inflation at a 40-year high. This has led the Federal Reserve to set a course to raise interest rates several times throughout the year with the first increase occurring this past March.

The fallout from the coronavirus pandemic created a snowball effect when the world was required to shelter in place for months which inevitably caused issues with the global supply chain. A shortage of semiconductor chips occurred when automakers canceled orders because the production of new vehicles virtually stopped.

The economic impact payments sent out to millions of households across the nation put more money into Americans’ pockets creating high-demand conditions. Sanctions imposed on Russia for their invasion of Ukraine have skyrocketed gas prices and increased the price of raw materials.

All of these events have contributed to a low supply of available new and used vehicles and have paved the way for dealer markups. This is where the automotive market stands today and why some brands are honoring price points previously advertised.

It's worth remembering that these unprecedented times have changed the way we buy new cars. Some manufacturers are taking a serious look at stocking significantly fewer configurations on dealer lots and moving more toward a retail ordering system.

While that will definitely be an adjustment — taking into consideration the months-long lead times associated with placing a retail order — ordering a new car with the exact features you want should get easier with time as brands and dealers fine-tune this business model, and eliminate a lot of inefficiencies associated with traditional dealerships.

Explore GMC's Best Deals & Special Offers

, Automotive Contributor

Cristyn is a member of CarsDirect's Socal-based team of pricing and incentive experts helping uncover must-know insights for car shoppers. A native of Bakersfield, California, Cristyn has a degree in Liberal Arts from Santa Monica College, with over 10 years of experience in the areas of research and data analysis.


Privacy Terms of Use Your Privacy Choices Disclaimer Cookie Policy Manage Preferences
COPYRIGHT 1999-2024 MH Sub I, LLC dba CarsDirect.com