GM seems to have taken a page from a rather poor playbook... .
As many of you are aware, dealerships are allowed to add what is commonly referred to as "additional dealer markup" (ADM) to vehicles. This practice is usually legal, because the dealership owns the property, and a dealership is allowed to price their property as they see fit. Where this practice starts to run afoul is if the ADM is hidden or is otherwise obfuscated causing confusion for the buyer.
Just to be clear, I am individually not a fan of ADM because I don't like to pay too much money. But, I respect ADM and believe it is the dealer's prerogative to advertise ADM clearly and transact as the law allows.
For this post, I am disappointed that GM publicly issues "warnings" to dealers about ADM, but then GM turns around and helps the dealers hide ADM.
In a perfect world, the dealer markup would be itemized and clearly disclosed as an upward pricing adjustment. GM used to clearly show MSRP and separately show ADM where it was aware of the practice. But now, GM is burying ADM on their website, which I've never seen before. GM seems to be aiding the dealers in a rather subtle way that I think is poor form given the negative sentiment against recent pricing practices.
Some dealership started to skirt into deceptive trade practices where they disguised the ADM as something else. For example, charging a buyer $10,000 for a window tint as a "mandatory option". And another exampe, the dealership is not allowed to wrongfully represent the ADM as a pass-through cost imposed by GM or something factually inaccurate.
The FTC has identified some issues, and they proposed language to codify more consumer protection around deceptive ADM.
The Federal Trade Commission has proposed a rule to
www.ftc.gov
Anyway, here's the example of what GM is doing now. Normally, GM on its own websites will simply show MSRP of dealers tock. And then they would put an asterisk about how final pricing is managed by the dealers. The key is they would itemize the ADM so a prospective buyer was presented with the ADM in a clear way. But check out these two GMC vehicles pulled from GMC.com.
Vehicle 1
Vehicle 2
For both vehicles, here is the footnote disclosure.
Vehicle 1 is no longer itemizing the ADM. It simply jumps from MSRP to the "Net Price with Dealer Fees" GM used to show the itemized difference, but now they stopped with the disclosure. This is very subtle, and a telling sign to me that GM is in favor of ADM since it's assisting the dealer in hiding it.
Vehicle 2 is doing what GM used to presente. Where the "Net Price with Dealer Fees" is explained and there is no doubt what is in the higher dealer price compared to MSRP.
