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Do federal subsidies and Volt markups belong together?

We hear that Chevy Volts are in demand right now. It isn't hard to tell that there's a bit of a call for these vehicles when a dealer tries to put one for sale at $65,590. Even though that 50 percent markup is an exception (thankfully not the rule), there are many other dealers adding several thousand dollars to the price of Chevy's halo car. This begs the question over at Green Car Reports: should people willing and able to pay above MSRP in order to get it now really also be getting your tax dollars in the form of the $7,500 tax rebate? According to our friend Chelsa Sexton in a recent blog post:

These federal rebates/credits should be made conditional on the vehicle selling at or below MSRP. It wouldn't preclude dealers from charging more, and early adopters who can afford it and have to be first on the block can pay the premium and forgo the rebate – but taxpayers wouldn't have to subsidize the egos involved.

Although we don't think it would make a big difference in reducing the number of tax rebates given out (not many people would be willing to take a double-hit by paying over MSRP and losing the tax rebate), it would almost instantaneously stop the price gouging and let the Volt sell at GM's intended price.

[Source: Green Car Reports via Talking Points Memo]

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