On August 10, 2017, General Motors (“GM”) issued a Dealer Bulletin (17-12) (“Bulletin”) to all GM Dealers regarding new requirements for the sale and service of new and used GM vehicles. The Bulletin provides harsh penalties for failure to comply with the new guidelines. This notice highlights some of the key provisions of the Bulletin.

Bulletin 17-12
Use Of Non-GM Parts & Non-GM Service Contracts

GM has delegated some responsibility to GM Dealerships regarding compliance with the National Traffic and Motor Vehicle Safety Act (“Safety Act”) when non-GM parts are used. GM has indicated that once a non-GM part is installed, it becomes the Dealer’s obligation to ensure the vehicle is in compliance with the Safety Act.

GM reiterates that non-GM parts/accessories are not covered under the GM warranty, and that installation of non-GM parts may void the New Vehicle “Bumper-to-Bumper” Warranty. Additionally, GM disallows the use of non-GM parts for any vehicles leased through GM Financial.

When a dealer sells any non-Chevrolet, Buick, GMC and Cadillac Vehicle Service Contract, the new rules require GM Dealerships to provide a customer notice that the contract is not endorsed by GM.

Required Disclosures and Potential Penalties

As part of the Bulletin, GM requires that its Dealers use the provided “DISCLOSURE OF NON-GM PRODUCTS CUSTOMER ACKNOWLEDGEMENT FORM” (click here for form) when using non-GM parts/accessories or non-GM Service Contracts. The form must be presented to the customer and signed during the sales or service process, including both retail and fleet customers. The original of the signed form must be kept in the customer file. This form cannot be modified or replaced.

GM considers any failure to have this form signed to be a material breach of Article 5.1 and/or 7.2 of the GM Dealer Sales and Service Agreement. As such, dealerships should be aware that GM will impose strict penalties for failure to provide and obtain the customer’s signature on the disclosure. This includes, but is not limited to, the following potential penalties:

• Up to a $500 surcharge per incident/VIN;
• Ineligibility for consideration for additional GM Dealership opportunities;
• Suspension from various current and future sales programs (including SFE & EBE) or;
• Termination of the Dealer Sales and Service Agreement.

Each Dealer should carefully review the new Bulletin and make sure its staff strictly complies with the guidelines. If you have any questions or concerns about the Bulletin, please do not hesitate to contact a member of the Dealer Practice Group at 248-645-9300 or by email.

Chuck LeFevre, Chair – [email protected]
Lawrence F. Raniszeski – [email protected]
Michael J. O’Shaughnessy – [email protected]
Eric R. Bowden – [email protected]
Alycia Pallach Wesley – [email protected]
Nicholas J. Ranke – [email protected]