By on March 4, 2009

DATE:         March 3, 2009                         GM 09-03

TO:             All General Motors Dealers & Saturn Retailers

FROM:        Jim Bunnell, Executive Director, NA Vehicle Sales, Service & Marketing

SUBJECT:    Vehicle Buyback Policy

…This letter also communicates GM’s policies for the repurchase of light and medium duty new vehicle inventory (herein after motor vehicles) upon the termination of a GM Dealer or Saturn Retailer (herein after “Dealer”) when there is no replacement Dealer. GM’s repurchase obligations are outlined in Article 15 of the General Motors Dealer Sales & Service Agreement and Article 21 of the Saturn Retailer Agreement (herein after “Dealer Agreement”). This bulletin provides the specific definition of “current model year” as referenced in the Dealer Agreement and outlines specific procedures for vehicle repurchases under both Articles. This letter does not replace, modify or alter the terms of the Dealer Agreement, and implementation of these policies is subject to applicable law.

GM’s policies applicable to vehicle repurchases are provided below:

 * GM will repurchase new, unused, undamaged, and unaltered motor vehicles of the current model year purchased by Dealer from General Motors

* GM will repurchase new, unused, undamaged, and unaltered motor vehicles of the previous model year purchased by Dealer from General Motors if purchased within 120 days before the effective date of termination. (Does not apply to Saturn vehicles because the Saturn Retailer Agreement provides for repurchase of qualified “current” model year vehicles only)

* New motor vehicles are defined as unused, unaltered, and undamaged vehicles that have 300 or less odometer miles at the time of inspection.

* Vehicles “not” eligible for repurchase:

Vehicles with damage that is either in excess of $200, or that which requires disclosure under state law (whether the damage has been repaired or not)

Demonstrators

Driver Training vehicles

Special event vehicles

Vehicles that have been upfitted or modified, including the installation of non-GM accessories

Vehicles acquired from other GM dealers (dealer trades)

* Vehicles will be repurchased at prices equal to the net prices and charges that were paid to General Motors.

* Dealer is responsible for delivering the eligible vehicles to a destination determined by GM that is paved, lighted, provides 24 hour security, and is in reasonable proximity to the dealership premises (preferably a GM Auction Site).  Vehicles will be inspected at this location, and therefore must be clean so as to allow for visual inspection.

* Payment will be made by GM as soon as practical following inspection. See Article 15.2.3 of the Dealer Agreement for further details.

Questions regarding the matters covered in this letter should be directed to your Zone Manager.

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12 Comments on “GM Vehicle Buyback Policy – For Bankrupt Dealers...”


  • avatar
    jaje

    I love this very vague statement: “Payment will be made by GM as soon as practical”. Nothing firm like NET 60, etc. I do not know that Article 15.2.3 states – I assume these are confidential agreements between GM and dealer.

  • avatar

    #1 This is a worldwide problem and it appears that every government except Sweden is going to bailout or loanout their auto manufacturers.

    #2 America should KILL the F22 program and only finance the manufacturing of spare parts for it. Allow the F35 program to continue.

    #3 America should use this as an opportunity to retool the auto industry wholesale. Both in the legislature and on the factory level. PASS LAWS demanding all cars sold for the 2012 year get at least 75mpg – using hybrid or fuel injection tech is optional so long as you meet emmission standards.

    #4 The credit crisis is the reason people can’t buy cars/homes – it is the reason the economy is a bear market – it is the reason oil prices are LOW. Right now oil ships are being used as storage vessels because of slowdown in demand of oil.

    My suggestion: buy oil futures, automaker stock: Honda, Toyota and Ford.

  • avatar

    Well there you go, make dealers purchase a bunch o’ 2009′s (not to mention the 2008′s and 2007′s they still have on the lots), start rolling out the 2010′s and offer to buy back – essentially – only the 2010′s.

    Being a dealer sucks.

  • avatar

    Actually it makes sense at it would be a bargain for GM to be off the hook to a dealer by simply buying back the inventory.

  • avatar

    Are any of these dealer agreements in the wild for the b and b to rip upon ?

  • avatar
    Detroit-Iron

    Vehicles that have been upfitted or modified, including the installation of non-GM accessories

    Would that include the undercoating?

  • avatar
    Jared

    Flashpoint: what does the F22 versus F35 high-low buy mix have to do with GM’s vehicle buyback policy?

    This thetruthaboutcars.com, not thetruthaboutdefense.com.

  • avatar
    thalter

    So this is GM’s answer to Hyundai’s Assurance plan? An assurance plan for dealers?

    WTF? Oh right, GM books the revenue when the vehicle is sold to the dealer, and not the end customer.

    Another shameless ploy for GM to shove more cars in the channel to artificially inflate their numbers.

  • avatar
    cleek

    Flashpoint :
    March 4th, 2009 at 9:46 am

    #3 America should use this as an opportunity to retool the auto industry wholesale. Both in the legislature and on the factory level. PASS LAWS demanding all cars sold for the 2012 year get at least 75mpg – using hybrid or fuel injection tech is optional so long as you meet emmission standards.

    Exactly how many borrowed trillions over how many years are you signing us up for?

  • avatar
    r129

    Interesting. I think that may explain where these vehicles are coming from. For those who aren’t familiar with the PEP program, it allows GM employees/retirees to buy slightly-used GM company-owned vehicles at an additional discount beyond the regular GM employee discount. Regular PEP2 vehicles normally have 3000-6000 miles, and are discounted an additional 7.5%.

    Now there are a random selection of NEW vehicles in various locations scattered across the country (the real PEP vehicles are usually concentrated in MI, IN or OH) that are being offered at the PEP2 price. And unlike the normal PEP program, they’re available to family members of GM employees. So in Michigan, for example, that could mean just about anyone.

  • avatar
    Robert.Walter

    Based on the interesting, but diversionary, commentary by Flashpoint, I guess I’m more convinced than ever that he’s Rick Waggoner. ;O)

    By the way, the GM lawyers might check their dictionaries, I believe “hereinafter” is one word.

    Oh, and for those that speak german, and know what the word “After” means, in this memo, the term hereinafter, reminds one of getting the GM shaft.


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