Think $41,000 Steep For A Chevy Volt? One Dealer Wants $20,000 Premium!

By John O'Dell August 2, 2010

Volt3Final750.jpgGouging Season Begins as Limited Initial Volume All But Guarantees Supply-Demand Imbalance

We know how the same is played - consumers are always happy to take a car dealer to the cleaners but resent it when the dealer wants a premium for a hot car. 

We even understand the dealer's motivation - if  customers demand bargains when times are tough and cars just aren't moving, then why not try to make a little back when there's a model that's expected to outsell supplies.

But when the government is urging people to help slash oil use by purchasing the most fuel-efficient vehicles out there, is it wrong to suggest that the idea of charging consumers steep premiums for such cars seems a bit, well, unpatriotic?

We haven't heard a lot about price gouging with the upcoming Chevrolet Volt - or the Nissan Leaf EV for that matter - but we suspect it will start and we've already got one doozy of an example.

A Southern California Chevrolet dealer's internet sales office - no names because we haven't talked to the dealership's management yet - told one of our colleagues that because the Volt would be in high demand and short supply, it wants a $20,000 premium for the $41,000 car!

Don't believe us?

Here's the body of the e-mail our colleague received after sending a purchase inquiry to the dealership:

Thank you for your online request, as you know the Volt is going to be a very limited production vehicle for the first 2-3 years. Demand is going to far exceed supply for this vehicle, initially our asking price for the Volt is going to be MSRP plus $20,000, we are expecting only receive 9 Volts all of next year. I will keep you in my customer base for when the Volt comes out and I will contact you with any information as I receive it. We are taking orders right now for the Volt, if you would like more information, please let me know and I will be more than happy to help you. Thank you.

Several folks here at Edmunds.com have since sent price inquiries to other Chevy dealers in Southern California and so far no one else has suggested that the selling price would be more than the MSRP.

But as our colleagues at EdmundsDaily point out, some dealers who will be selling this 21st Century car still are using 19th Century horse-trading techniques aimed at getting you to "come on down and talk" rather than simply providing price info and letting you decide the next step.

Sheesh.

We're sure that someone out wthere will be quite willing to pay a huge premium to get a Volt before his or her neighbor does, but our suggestion is to tell gougers No! in whatever colorful terms you care to use.

The entire new-car pricing process is ridiculous. Although there is a manufacturer's suggested retail price, it's the merest of suggestions. Even the prices scrawled across the windshields on dealers' lots have little relationship with reality.
 
As a result, players on both sides spend enormous amounts of time, money (we have a friend who devoted two vacation days to bargaining for hours on end at a Ford dealership to ultimately "save"  $100 on a car last year - not such a good deal when you consider what it would cost him to replace those two lost days) and emotional capital trying to best one another.

Instead of seeing our local dealers as helpful allies, we usually see them as enemies, and many car-sales people consider consumers to be prey. 

In our perfect world, used-car dealers would buy and sell used vehicles and new-car dealers would sell new cars (and trucks) at a competitive price, and the whole "trade-in" scenario would be tossed out.

If you didn't want to sell your old model to a used dealer, you could sell it in a private transaction. But the whole process would be separate from the new-car deal and most of the haggling would be taken out of the process. That's in our perfect world.

When was the last time, after all, that you dragged your old Kenmore refrigerator down to the local Sears and asked how much they'd give you for it against the price of a shiny new one?

AutoObserver's Bill Visnic, who broke the Volt gouging story over the weekend, suggests that because GM is alive thanks to a taxpayer bailout last year, the idea of Chevy dealers "clipping the very people who helped keep them in business is a new and ugly twist on an age-old auto-industry phenomenon."

We agree, and we urge readers to reach out to their local Chevy and Nissan dealers and let us know if there are others out there trying to profit from the initial limited supplies of Volts and Leafs.

We'll post dealer responses, along with their names.

John O'Dell, Senior Editor

Related Posts Plugin for WordPress, Blogger...

LEAVE A COMMENT

Click here to comment on this entry.
chijayhawker says: 2:10 PM, 08.02.10

I contacted a Nissan dealership via e-mail here in the Chicagoland area, and a salesman called me back shortly afterwards. He claimed the Leaf was going to be selling for almost $7,000 more than MSRP because of special emissions rules regarding it. He kept claiming that that was the price even after the Federal Tax Rebate. I quickly found another one that so far has made no claims to the pricing of the Leaf here in Illinois. I can provide further details if you need it. I dispatched the one with the phrase: Apparently you don't know what you are talking about, I'll be taking my business elsewhere. Goodbye!

asbasile says: 2:33 PM, 08.02.10

I am in line to purchase a Leaf here in SoCal, and as my wife can attest, am an eager buyer. However, if I can't get one for MSRP, I will take that as God's way of telling me to wait. The Nissan dealer I contacted seemed pleasant, and indicated they don't think there will be a premium above MSRP.

dzajic says: 5:58 PM, 08.02.10

Last time I checked this was a free country with a free-market economy.

Dealers can charge whatever they want. Customers are similarly free to go to the dealer with the lowest price (if they are buying on price alone).

Anyone who thinks there's something wrong here should give a convincing argument about why the basic rules of capitalism don't apply to this case or they should go live in a communist country so they can appreciate and understand how great they have it.

greenpony says: 7:51 PM, 08.02.10

We're going to argue about a 50% markup on, what, ten cars per year? Let the dealers make their profit off the early adopters. It's been a terrible year for them too.

http://coloradoright.files.wordpress.com/2009/08/obamacare_flag_poster_profit.jpg

evnow says: 9:34 PM, 08.02.10

List of Dealers who will sell LEAF for <= MSRP

http://www.mynissanleaf.com/viewtopic.php?f=23&t=445

There are plenty of dealers promising to sell at MSRP.

davemart1 says: 12:07 AM, 08.03.10

It seems clear that Nissan have taken far more effective control of the ordering process than GM. You probably could be price-gouged on the Leaf if you were daft enough, but with a modicum of sense it seems easy enough to avoid.
You are alone in the jungle with GM.

tnooch1 says: 6:00 AM, 08.03.10

According to Wikipedia's "Car dealerships in North America" article, "In the United States, direct manufacturer auto sales are prohibited in almost every state by franchise laws requiring that new cars be sold only by dealers."

It is frustrating to me that even if I pay cash for a typical model, dealing with car dealerships is so much more painful than buying retail consumer items.

blackadder5639 says: 8:18 AM, 08.03.10

Who in their right frame of mind would pay a $20,000 premium for the Volt? Not me..... I would buy a "normal car" or a hybrid and wait until, perhaps, there is a 2nd-gen Volt!

Reminds me of all those people who camped up to pay $500 for the first iPhone... Madness!

bmw_gto says: 3:18 PM, 08.03.10

Three years ago I was excited to get a new Mustang Shelby GT500. I went to a few local dealers here in Los Angeles and when I discovered the best deal going was $20k over list, I passed. No way could I enjoy a car knowing I paid over list price. I'd feel like a chump every time I looked at it.

I went out and bought a BMW 335i - for $2000 below sticker - and it was a far better bang for the buck. Perhaps the best car I have ever owned. I am now a big BMW fan.

Charge what you want. It's a free country. Detroit just needs to be prepared for the consequences.

kingkhalas says: 11:20 AM, 08.04.10

ridiculous.

ADD A COMMENT

No HTML or javascript allowed. URLs will not be hyperlinked.