Supply appears to not be keeping up with demand for Chevrolet’s new hybrid-electric car, and dealerships are taking advantage of the situation in totally shady, but apparently legal ways.
Normally, customers pay less than the sticker price listed on a new car. Often, way less. But there’s no law against a car dealership asking customers to pay over the vehicle’s sticker price if the vehicle is no longer brand new. There is also no law stipulating who, exactly, is eligible for the $7,500 tax credit provided by the federal government for each new Chevy Volt sold.
According to the LA Times, Chevy is only producing 10,000 Volts this year, which supposedly isn’t keeping up with customer demand. All of these factors put dealerships (excuse the pun) in the driver’s seat, and some “pre-owned” Volts—often with under 100 miles on them—are being listed for $5,000, $10,000, even $20,000 above the $41K MSRP.
How can this happen? Well, basically because there aren’t rules saying that this can’t happen.
The first part of this situation that stinks is that dealerships have figured out ways to pocket the $7,500 federal tax credit. They do so by putting a few miles on the car, therefore deeming the car “used.” Only a buyer who purchases the vehicle new gets the credit. In some cases, dealerships are selling the cars new to other dealerships, which get to earn the credit and then re-sell the Volt for whatever price the market bears. The LA Times explains:
Mark Modica, an investigator for the watchdog group National Legal and Policy Center, said dealerships are buying Volts from other dealers, claiming first title to qualify for the incentive, and then reselling the vehicles at inflated prices.
He wrote in a blog post that a Chicago Chevrolet dealer who planned to apply for the subsidy was selling a Volt as used with 10 miles on the meter.
Once the car qualifies as “pre-owned,” a seller can ask whatever price he pleases for it—and of the few dealers that have Volts on the lot, many are asking $45K, $50K, and up. Remember, anyone buying such a vehicle doesn’t get the $7,500 tax credit. The chances of talking a car salesman down on the price seem pretty unlikely as well.