Despite car inventory increasing and sale prices dropping, various issues are still preventing automakers from filling dealer lots with shiny new cars. For a while, the trouble was actually building and completing the cars. Now, General Motors is having trouble shipping them away from the factories. The solution? GM is paying dealers for each car that gets picked up.
Yes, dealers actually stand to save quite a bit of money by circumventing the conventional cost of shipping cars and trucks from factories. According to Automotive News, instead of paying GM to ship the vehicles directly to dealers, GM will pay dealers up to $1,050 per vehicle recovered directly from the factory. Presumably, it costs GM less to pay dealers than it does to ship every car, all while incentivizing dealers to foot a bill that is normally much larger than that.
Shipping is often factored into the Destination charge that every new car has; usually anywhere from $700 to $2,000. While the customer won’t see a change in this destination charge, GM is tiering the incentive depending on the dealer’s distance from the factory. Dealers up to 100 miles away get $225 per car, $425 for 400 miles, and $1,050 for 800 miles at certain factories. Specifically, the Arlington, Texas; Wentzville, Missouri; Fort Wayne, Indiana; and Oshawa, Ontario plants.
More than 3,100 dealers have taken GM up on the deal, with over 25,000 cars self-collected so far. Some dealers bring light trucks with trailers, some bring eighteen-wheeler trucks, and others pack a team of dealer employees into a van and drive the cars home. Some have even flown drivers to the cities where plants are to drive the vehicles home. And so far, dealers love the arrangement of making money to pick the cars up while saving on shipping costs. It’s a nice double dip.
Got a tip? Email email@example.com