• Page :
  • 1
  • Text Only
Voting History
rated:
http://www.mychevroletvolt.com/chevrolet-volt-tax-incentives-and...
http://www.irs.gov/pub/irs-pdf/f8936.pdf

Buying a 2011 Chevy Volt qualifies one for a $7500 tax CREDIT. Looking at the IRS form 8936 I don't see any requirement that the car be used for a specified period of time. It seems as long as the vehicle is placed into use by the owner claiming the credit, one qualifies. What is to stop someone from purchasing the car, using it a few months, claiming the credit, then selling the car?

Can this be profitable?

-$41000 purchase price (assuming you can get one at MSRP)
-$3200 sales tax, 8% assumed (not all states have sales tax on cars)
-$300 registration/tag fees (some states have property tax on cars which will be more)
+$7500 tax credit
----------------------
=$37000 net cost. If the car can be sold within a few months of purchase for greater than $37k, any extra is profit to the flipper.

Anyone know the odds of this being profitable? How were sales and resales of other hybrids like Prius when they were first released?

Member Summary
Most Recent Posts
let me know when you get one for 41k . Most are getting sold over sticker on autotrader.com .

manuvns (Apr. 20, 2011 @ 1:42p) |

As some others have stated I think your biggest challenge will be getting one for list. Consumer Reports had to pay sev... (more)

secstate (Apr. 20, 2011 @ 3:16p) |

One thing I can see is not everyone qualifies for the credit. And since property tax (license fee) is based on original ... (more)

kickerstarter (Apr. 20, 2011 @ 8:03p) |

Quick Summary is created and edited by users like you... Add FAQ's, Links and other Relevant Information by clicking the edit button in the lower right hand corner of this message.
  • Also categorized in:
Thanks for visiting FatWallet.com. Join for free to remove this ad.

baddriver said:   [-$41000 purchase price (assuming you can get one at MSRP)
-$3200 sales tax, 8% assumed (not all states have sales tax on cars)
-$300 registration/tag fees (some states have property tax on cars which will be more)
+$7500 tax credit
----------------------
=$37000 net cost. If the car can be sold within a few months of purchase for greater than $37k

Sorry, I will just buy it new from the dealer

Non Refundable tax credit

Cars generally lose 20% of their value as soon as they're driven off the lot but these cars are so new and unestablished that their depreciation curve is unknown. A major component of it is the supply of cars available and a function of oil prices.

Why would somebody buy from you for more than what they could get from the dealer? The only way I could see this working is if the credit was about to expire/be reduced. But I think the depreciation, taxes and fees would destroy any potential profit.

Why would anyone buy a used car when they can get it from the dealer at the same price?

brettdoyle said:   Cars generally lose 20% of their value as soon as they're driven off the lot but these cars are so new and unestablished that their depreciation curve is unknown. A major component of it is the supply of cars available and a function of oil prices.never the case with niche market cars.

goodluck trying to find one in stock anywhere anytime soon.

Why would someone pay you more for the car than what their own net cost would be if they purchased new from a dealer (and also received the tax credit)?

Additionally, rebates have traditionally had a negative impact on prices for pre-owned vehicles. I would think this credit would operate similarly (i.e. consumers do not view the car as truly retailing for $41K, but rather $33.5K).

RJG said:   Why would anyone buy a used car when they can get it from the dealer at the same price?have you seen the used car market? i know plenty of people that buy used and pay more than what the vehicle could have been purchased for brand new. Everyone automatically assumes that buying used is always cheaper...when that's not always the case.

RonK said:   Why would someone pay you more for the car than what their own net cost would be if they purchased new from a dealer (and also received the tax credit)?

Additionally, rebates have traditionally had a negative impact on prices for pre-owned vehicles. I would think this credit would operate similarly (i.e. consumers do not view the car as truly retailing for $41K, but rather $33.5K).
when that credit goes away the retail price is gonna remain the same at $41k. the credit is viewed just like an other rebate.

brettdoyle said:   Cars generally lose 20% of their value as soon as they're driven off the lot but these cars are so new and unestablished that their depreciation curve is unknown. A major component of it is the supply of cars available and a function of oil prices.

But it was shown in the case of hybrids during the last massive spike in gas prices how well they retained there values. Some idiot I used to work with paid a ridiculous amount over sticker just to jump the 'line' he waiting in for a Prius. A 'new' technology vehicle like the Volt in theory should hold it's value pretty darn well judging by the positive reviews.

OP you have chosen your username wisely.

chaster86 said:   
But it was shown in the case of hybrids during the last massive spike in gas prices how well they retained there values. Some idiot I used to work with paid a ridiculous amount over sticker just to jump the 'line' he waiting in for a Prius. A 'new' technology vehicle like the Volt in theory should hold it's value pretty darn well judging by the positive reviews.


Seriously? The reviews I read seem to imply that the main difference between the Volt and a turd with wheels is that the turd stinks less when it's cold out.

Triple B??

Alcibiades said:   baddriver said:   [-$41000 purchase price (assuming you can get one at MSRP)
-$3200 sales tax, 8% assumed (not all states have sales tax on cars)
-$300 registration/tag fees (some states have property tax on cars which will be more)
+$7500 tax credit
----------------------
=$37000 net cost. If the car can be sold within a few months of purchase for greater than $37k

Sorry, I will just buy it new from the dealer


and claim the tax credit for the same $37k net cost.

RJG said:   Why would anyone buy a used car when they can get it from the dealer at the same price?In some states, like Arizona, private party sales are not taxed.

LongDongSilver said:   and claim the tax credit for the same $37k net costNot really, as many states will make me pay sales tax on my used car purchase for 37k. So that will end up around 40k, more than buying new from the dealer

caterpillar123 said:   RJG said:   Why would anyone buy a used car when they can get it from the dealer at the same price?In some states, like Arizona, private party sales are not taxed.

so in AZ this could work right after credit expiration. When does the credit expire??

I thought the OP was going to toss in his own lifetime warranty to sweeten the deal. Given I live in a GM area, my guess is anyone can get one with an employee discount making the chance of profit zero?

Here's something to consider, I was at a Chevy dealer last week and they only had one Volt they bought from another state because it wasn't sold around me. So, if you could buy the Volt and take it to a state where it can't be easily acquired, you could get your sticker (or more?), so you might even be able profit from the tax credit and additional profit in a state where you have the only one!

badinvestor said:
Buying a 2011 Chevy Volt qualifies one for a $7500 ...

Corrected

(I'm not but...) I wonder if there's a way in some state's to legally buy the car and get the tax credit, but not have to pay sales taxes by being a registered car dealer.

(I.e. As a dealer, you are buying the car to resale at a profit, so you should pay income tax on your gains, but not pay sales tax) Of course the question would be if you could meet the requirements to get the tax credit in this situation.

Sounds too risky to me, especially if you end up paying close to retial. Dealers may not be negotialbe now, but will after the tax credit ends, meaning you are overpaying, but getting a tax credit. Perhaps someone in a low tax state, that can negotiate with the dealer could potentially profit on this.

let me know when you get one for 41k . Most are getting sold over sticker on autotrader.com .

As some others have stated I think your biggest challenge will be getting one for list. Consumer Reports had to pay several thousand more (I think 7k more) than sticker for the Volt they purchased and they were underwhelmed with it, for it is worth.

One thing I can see is not everyone qualifies for the credit. And since property tax (license fee) is based on original purchase price (at least in CA), there is an incentive to buy the car used after factoring in the tax credit. However, all the registration fee will be extra to be paid, and even sales tax may need be paid twice. Which is a huge bummer.

Last but not least, I would not spent my money on an overpriced, first generation Volt.



Disclaimer: By providing links to other sites, FatWallet.com does not guarantee, approve or endorse the information or products available at these sites, nor does a link indicate any association with or endorsement by the linked site to FatWallet.com.

Thanks for visiting FatWallet.com. Join for free to remove this ad.

TRUSTe online privacy certification

While FatWallet makes every effort to post correct information, offers are subject to change without notice.
Some exclusions may apply based upon merchant policies.
© 1999-2014