General Motors has announced a 60 day money back guarantee policy for all new Chevy models, including the Chevy Volt. The move sets up a scenario where purchasers can buy a Volt, claim the $7,500 federal tax credit (and most likely state credits) and return the vehicle for a refund within 60 days. Did GM really not consider this glitch, or is this just another way for Government Motors to prop up politically important Volt sales leading up to November elections?
IRS tax form 8936, for plug-in motor vehicle credit, does not have any minimum time requirement for buyers to own their qualified vehicles. The vehicle only has to be new and purchased during the tax year being claimed. Buyers of Volts will have documentation and VIN numbers for qualifying vehicles. The 60 day return policy lays the groundwork for a very easy way to scam the IRS out of $7,500. Buyers will most likely have to eat registration fees and sales tax paid that will be deducted from refund. So, in an effort to save taxpayers millions of dollars on the potential scam and save GM and its shareholders from losing more millions of dollars on the Volt, I suggest the Volt be exempted from the return program.
Of course, there is the possibility that Government Motors is aware of the situation. Volt sales should pick up, millions of dollars in tax credits will be claimed and GM can tout improved sales. GM will then have returned Volts to sell that will no longer qualify for the tax credits; the vehicles will be sold as used for thousands of dollars less. GM will have to reimburse dealerships for some portion of the losses. And unless the IRS has a database of VIN numbers for qualified vehicles, buyers of used Volts with low mileage may be tempted to claim the tax credit again, upping the federal subsidy to $15,000 per vehicle. Hopefully the IRS has safeguards to prevent double claiming of EV credits. In the past, the IRS did not seem too concerned as there was not even a field on prior year forms for VIN numbers, something that changed after my criticism of GM dealerships taking tax credits.
Our government can return ANY rebate/return in 60 days???
People don’t buy Volts from GM, they buy them from Chevy dealers. The stories I can find on this don’t explain the details.
“More study is needed.” But don’t send me money.
GM’s customers are their dealers. The dealer, in turn, sells to the public. A “GM buyback,” taken literally, would leave the dealer out of the transaction. I suspect there is some dirt in the details. And I wouldn’t be surprised it GM is screwing their dealers somehow.
One other thing to note, this is a product-wide, satisfaction guaranteed program. It does encompass the Volt, but it is for most all GM cars.
Sales tax and registration fees in Illinois would be a little over $3,000. Even with a loan origination fee and a month’s interest (hey, I’m not keeping the thing the full 60 days if I don’t have to), this could be some serious money. I don’t think that GM can limit the number of returns, but does the government limit me on one credit per year? How ’bout I start up a shell company with a small business loan to buy a fleet? 100 Volts = $400,000 in net untaxable income and paid to me in salary, yes? If you add that to unemployment and food stamps when I “close the company down”, this could start to add up to serious money. Just double check the law and do it before they fix it.
GM may think it built and sold the Volt, but it didn’t. Obama did. And it could still be a success as they define the term. What a model for the public / government-owned private company partnership. Caution: Genius Scam Artists at Work.
Coach: Not every state has sales taxes.
It costs less than a hundred dollars to register a new car in Oregon.
Kristopher beat me to it. There are a lot of “free” electric god cars and all terrain vehicles plying the paths and trails of Oregon because of plug in tax credits.
Somehow I just can’t see a whole raft of people using this scheme.
Too much trouble for not enough money.
Not that there won’t be a few, but not anything statistically significant.
It’s like welfare queens, some of them must exist, but not in numbers to necessitate new laws directed at corraling them.
Any system like this, any government entitlement program for sure, will attract a certain number of miscreants. But the question to ask is whether they pose a significant problem. If we had regulations to try and cover every single way of abusing the system, then we would all be cranking out diatribes about the byzantine puzzle that government has become.
Maybe it’s better governing to see if a problem crops up and then deal with it.
That’s called ‘management by exception’.