GM denies a claim that Chevrolet dealerships are getting the $7500 tax incentive

Article by Christian Andrei, on May 31, 2011

General Motors denies a claim by a Virginia-based non-profit group that Chevrolet dealerships are stealing a federal tax credit from customers. GM describes these allegations to be “confused.” The federal government is offering a $7500 tax credit to those who buy electric cars such as the Chevrolet Volt and Nissan Leaf to help offset the high prices of these cars.

Two dealerships were identified by the National Legal and Policy Center to have titled a new Volt. These two dealers claimed the $7500 tax incentive and kept these amounts. The vehicles were then resold as used. Those who purchase a used Volt can’t qualify for the tax break.

This is why the NLPC is claiming that these Chevrolet dealerships are “gaming” the tax credit. Volt spokesman Rob Peterson responded to the accusations, saying that there’s nothing to worry about since these two dealerships can’t legally sell a new Chevrolet Volt. The California-based Kia dealership obviously can’t sell the Volt.

The other dealership – a Chevrolet dealer in Chicago – won’t be able to sell the Volt as a new vehicle since it is not included in the model’s launch markets.

Peterson explains that the practice is acceptable just as long as customers are told that these cars are technically used and can’t be eligible for the tax credit.

To sell a Volt, these dealerships have to purchase one from a Chevrolet showroom located in one of the Chevy Volt’s launch markets. The purchasing dealership (Kia or Chicago-area Chevy) has to title the vehicle, which means it has to be sold as used. Under the law, only the first-title owner could get the $7500 incentive.

The dealership then gets the money rather than the end consumer. Peterson denies the NLPC’s claims that this scenario takes place when dealerships undertake “dealer-to-dealer” trades to swap Chevrolet Volts between showroom lots. He said that what actually happens is that the title is merely transferred from one dealer to the next.

Topics: gm, chevrolet volt

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