GM cheats on the prices of their cars

A few weeks ago, General Motors subtly raised the prices of a number of GMC and Buick models, but in a way that allows the automakers to claim the car’s price is lower than it really is. It’s not a matter of dealer markups—that’s a separate issue since they’re set at the dealer level—or even a year-over-year price increase caused by higher manufacturing costs (as cited by other manufacturers to justify higher MSRPs). Rather, it’s GM breaking up a previously standard feature and then adding it back as an expensive “option” that can’t be removed.

What are the benefits for GM? This allows him to advertise his vehicles at a lower price than what he ultimately charges the customer. And this is not the first time General Motors has played price games with customers.

GM is introducing sneaky price hikes

August 9 Detroit Free Press noted that OnStar — previously a standard package on all new GM vehicles that came with a three-month trial of the base Connected Services package — is now optional on most new GMC and Buick vehicles, as well as the Cadillac Escalade. The material notes that Chevrolet is currently finalizing plans to implement these changes in its lineup.

However, the OnStar system isn’t really optional. New GMC, Buick, and Escalade vehicles (and presumably future Cadillac and Chevrolet models) include OnStar as a $1,500 feature that cannot be removed. This means that buyers have no choice in the matter. Each of the aforementioned vehicles comes loaded with OnStar from the factory — despite it being advertised as an option — and customers will have to pay an additional fee regardless of whether they ever activate the OnStar system or use it.

You can see the changes for yourself by taking advantage of the configurators on the brand’s website and comparing a car built for the 2022 model year with a car built for 2023.

Auto manufacturing has been volatile over the past few years, from production shutdowns to persistent microchip shortages. On some vehicles, we’ve seen automakers increase prices multiple times per model year or remove some features. But this is the first time we can remember an automaker listing an option and advertising a price that simply isn’t true.

What you get for your $1,500 must-have OnStar option

OnStar is a subscription-based telematics service that began appearing in a number of Cadillac models beginning with the 1997 model year. Since then, it has evolved from a simple emergency notification and safety system to now provide a variety of features such as vehicle diagnostic checks, location and the ability to send commands to your car via Amazon Alexa.

This new OnStar scheme includes a three-year subscription to the ultimate Premium level, which includes all OnStar services and normally costs $49.99 per month. So you get something. But our problem is that buyers who don’t want or need the full list of OnStar services are stuck paying for them anyway.

We’ve seen deceptive pricing from GM before

Let’s walk you through General Motors’ entry-level L and SLE trims. For years, GM’s budget models (such as the Chevrolet Cruze or GMC Terrain) had a base price that more or less matched that of their competitors.

Take the 2018 Chevrolet Traverse, for example. The MSRP of its entry-level L trim started at US$30,875, including destination charges. At first glance, that made the Traverse an attractive choice for price-sensitive buyers who were also considering the entry-level Honda Pilot LX ($31,875) or the base Ford Explorer ($33,135). The Traverse was also loaded with tech features, including a touchscreen and Apple CarPlay and Android Auto smartphone compatibility—none of which were standard on the Pilot or Explorer.

However, there was something funny about the Traverse configuration. The next-level LS tacked an extra $2,120 on the sticker, but the only added item was tinted glass. A closer look at the order reveals what’s going on. The Traverse L was a special retail order model, which meant you had to go to the dealer and special order the L (which was only available in white and didn’t allow buyers to specify any options, accessories, or even all-wheel drive). and then wait for their car to be built and shipped. Buyers who saw an advertised starting price of $30,875 and expected to find it on the dealer lot were instead met with LS models starting at $32,995.

That’s still less than a Pilot or Explorer with a touchscreen and smartphone compatibility — though more expensive than the Hyundai Santa Fe with Android Auto/Apple CarPlay at $31,800 — but it wasn’t as cheap as a Chevrolet buyer might expect . Meanwhile, even though entry-level Pilots, Explorers and Santa Fes were harder to find than higher-spec models, buyers could still grab one right off the dealer’s lot. There are no hidden hoops to jump through.

This pricing game was common for GM vehicles in the mid-to-late 2010s. The special-order-only 2016 Cruze L started at $17,495, while the next-level LS ($18,995) available at dealerships added only a center armrest and floor mats. The 2018 GMC Acadia SL had an MSRP of $29,995 (it was announced on GMC website starting at $29,000 before destination charge), but it was also a special order car. The more common SLE-1 started at $33,555 and only added LED daytime running lights, satellite radio and rear floor mats. You could also get the SLE-1 in colors other than white or silver, add four-wheel drive, and choose from a number of dealer-installed options, but all of these were optional.

Chevrolet and GMC dropped these special-order vehicles for 2022, but prices for some cars have changed dramatically for this model year. For example, the 2022 Tahoe LS was originally priced at $51,395, but later increased to $53,795 (note that this price does not reflect the current $50 credit due to the Tahoe’s lack of front and rear parking sensors). Its twin, the GMC Yukon, suffered a similar fate, starting at $53,295 at the start of the 2022 model year before rising to its current starting price of $55,795. Er, make that $57,245 (plus $1,500 for the OnStar package, minus $50 for the lack of a steering column lock).

Edmunds says

For more than half a decade, GM played the price game by promoting affordable models that were hard, if not impossible, to get. We thought that stopped when those models were discontinued in 2022, but recent OnStar news looks more like it.