Dealers Taking the Volt $7,500 Tax Credit: “Capitalism at its worst,” Says One Buyer

Volt in showroom

Lots of stories are breaking about Chevrolet dealers selling Volts to other dealers and then claiming the government’s $7,500 green tax credit for themselves.

Then they are reselling the cars as used (one in Chicago had 10 miles on the odometer), without the tax credit and sometimes with incredible markups. A dealer in Oregon put a sticker of $51,999 on the $41,000 MSRP car.

When GM got wind of these shenanigans, it told dealers to cool it on the markups. But there doesn’t seem to be anything illegal (yet) in what these relatively few clowns are doing with the tax credits. A Glendale, Calif., dealer has three “used” Volts on his lots with near-sticker prices and no tax credit for buyers.

If nothing else, all this conveys the pungent odor of scam and provides yet one more proof of why car dealers are so disrespected. We noted that a recent survey by CarGurus gave them fairly good marks overall, but one poor experience with a dealer is worth more than five positive ones, in my view.

Volt buyerContrary to what you may have heard, the Volt is in high demand, at least in some quarters, while production is low, and this debacle is the result. Even though fewer than 500 have been sold, a lot of people want them, particularly in the 43 states where the car has not yet been made available.

The other complication is that the tax credit, intended for end-users, was so sloppily written that Treasury now admits up to $33 million in improper “battery car tax credits” have been claimed by cheats. It should have been written as a point-of-purchase deduction.

In short, we have another story where the blame can certainly be passed around. But the consequences will surely fall on GM for its stupid release policy for the Volt—encouraging demand without filling the supply line, giving the car to some states and not others, not setting proper dealer policy.

And, one can only surmise, the image of greedy car dealers, cooking up yet another scam in their back rooms, will further tarnish their shabby reputations.

Is it time to dump the car-dealer-franchise model, finally? Have you had enough?

—jgoods

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  1. Randy
    June 5th, 2011 at 08:32 | #1

    And while we’re at it, so-called capitalism should exlude this kind of subsidy for select products. If they can’t survive in an open market they shouldn’t be produced. If you think about it, the government is picking your pocket through taxation to give certain people money to buy products. It’s been working the same way with many of these energy efficiency programs to give people rebates on more energy-efficient products. In many cases, it’s taking money through over-taxation from people who can’t afford to buy these products in the first place to give to people who can. The result is that those with less money are overtaxed by the government, and taxed again when they pay their energy bills. The Chevy Volt is overpriced by about $10,000. If Prius owners were given the same tax credit (the car is only eligible the first two model years) then Toyota would either jack up the price to effectively grab it for themselves, or Chevy wouldn’t sell any volts at all. (Would you buy a Volt for $30,000+ when you could get a Prius for $15,000?)

  2. Randy
    June 5th, 2011 at 08:25 | #2

    What’s so difficult about prosecuting these crooked dealers and putting a few in jail? Just because they claim the credit doesn’t mean it should be paid, the government simply needs to scrutinize each one and make sure it’s going only to private individuals. Fleet, corporate and business buyers should be ineligible. Problem solved.

    If you want to find organized crime in your community, go to the local car dealer.

  3. panayoti
    June 4th, 2011 at 17:47 | #3

    The answer is obvious but what would YOU propose?? As bad as the current model is, it can be beaten by an astute buyer. The Saturn model was full of hope but didn’t win many converts except women. I personally am unaware of other models but perhaps you, with your incredible researching acumen, can provide an alternative. Looking forward for that to happen.

  4. June 4th, 2011 at 02:57 | #4

    some of these characters would steal a blind mans music

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