Wednesday, June 1, 2011

Taxpayers Getting Scammed by Chevy Volt?

By Mark Modica

On Friday night, I discussed the appearance that GM dealers are gaming the Chevy Volt tax credit on Fox Business Network's "Follow the Money" show with Eric Bolling. Here's a transcript:

Eric Bolling: Outrage alert. Former Saturn dealer Mark Modica says there is something rotten in the business of marketing and selling the Chevy Volt. He claims he uncovered underhanded shenanigans that make the Volt appear to be a success story. Mark is here with us right now. Ok, Mark, tell us what happens. Dealers are selling to each other to grab that tax incentive.

Mark Modica: Hi Eric. Yes. What I did, was I did a search on some websites to check the availability of Volts. GM was claiming that demand was exceeding supply and that there was not enough out there. What I found was that there is plenty out there including six of them within seventy miles of my location. But then I uncovered something more disturbing. There was actually a bunch of used ones being sold. One in particular was at a KIA dealer where they had four of them in California one with eleven miles one with thirty miles sold as used. So what they are doing is, they are titling the vehicles, one dealership buying them from another, taking that $7,500 tax credit that they are allowed, and then reselling them at MSRP. They are not reducing the price. They are looking to game the system.

Eric Bolling: So as the price of gasoline goes up and maybe the demand for the electric car goes up a little bit. They are realizing they don't have to offer that seventy five hundred dollar tax credit anymore. They are keeping it for themselves?

Mark Modica: No, not at all. Demand? I don't think that demand is there. You have to look at what this car does, Eric. It gets about thirty miles on the charge and then gets about thirty miles per gallon on premium fuel. So you are not saving a lot of money there.

Eric Bolling: They are just not selling. They are just sitting on lots. Just sitting on the Ebay sites, without being sold?

Mark Modica: That is how it appears to me. But it looks like these dealerships are trying to get some money by at least getting the tax credits...

Eric Bolling: Right. Right.

Mark Modica: ...and then still hoping to sell them at full price.

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