Friday, June 3, 2011

Tales from Bailout Nation (cont.)

Well, Gitmo's still open, he formalized indefinite detention of suspected terrorists, he just signed an extension of the Patriot Act he opposed as a Senator, we're still kinetically engaged over in Libya despite the expiration of the War Powers Act, the economy shows real signs of double-dipping and unemployment is still way too high...

... the dude has to run on something though, right?

Team O desires to make the domestic auto bailout a signature feature of it's re-election campaign but yet another recent development may have them re-thinking that strategy.

It would appear that some dealerships are buying up Chevy Volts, taking advantage of the $7,500 credit and flipping them as used cars at a slight mark down.

If you’re desperate to get yourself into a Chevrolet Volt you might make a visit to the Kia dealer in Glendale, Calif. Though most Chevy dealers in the seven initial launch markets for the plug-in hybrid claim to be on back order, three “used” Volts are sitting on the Kia dealer’s lot.

But don’t expect much of a bargain. True, the asking price of $39,995 is a modest discount off the $41,000 sticker price. But a salesman at the suburban Los Angeles showroom said he did not believe the three Volts would qualify for the $7,500 federal tax credit allocated for buyers of new battery vehicles.

The salesman's comment suggests there is truth to reports that some dealers are gaming the system to claim battery car tax credits for themselves, as first reported by a conservative think tank called the National Legal and Policy Center.

“Many Volts with practically no miles on them are being sold as ‘used’ vehicles, enabling the dealerships to benefit from the $7,500 credit supplied by the American taxpayers on each car,” NLPC’s Mark Modica said in a blog post on the practice. “The process of titling the Volts technically makes the dealerships the first owners of the vehicles, which gives them the ability to claim the subsidies. The cars are then offered to retail customers as ‘used’ vehicles."

Though, technically not illegal, we can't imagine this is what the administration had in mind to get people to buy their cars.

Or is it?

A spokesman for the Internal Revenue Service declined to comment beyond pointing to the language of the tax code passed by Congress to help promote the sale of battery vehicles. According to Title 26 Section 30D, a vehicle qualifies for the credit when:

(a) The original use (of the vehicle) "commences with the taxpayer," or
(b) The vehicle "is acquired for use or lease by the taxpayer and not for resale."

Sounds like the dealer ought to lease the car or else they would be running afoul of the law.

While this may seem a minor deal compared to lying to the American public over how the GM TARP loan was paid off or how unions were rushed past secured creditors to the head of the line in the bankruptcy proceedings (and it is), it represents just one more element of shadiness to the whole sorry affair of the GM and Chrysler bailouts.


SarahB said...

The average sleezeball will ALWAYS find a way to out smart elitist bureaucrats. I sort of love it.

Lori said...

I got my Rondo from Glendale Kia. The sleazeballness on display here doesn't surprise me one teeny-tiny bit.