Skip to comments.More Taxpayer Largess for Chevy Voltó on Leases
Posted on 03/12/2012 9:33:40 AM PDT by jazusamo
The recent lowering of lease costs for the Chevy Volt led me to think about the amount of money General Motors or Ally Financial (also taxpayer-owned) was going to lose when the quickly depreciating leased vehicles begin to be returned. I then recognized another egregious waste of taxpayer money being spent to support the struggling car. Taxpayers are paying the tax credits, which go to the lessor of the Volt (most likely Ally Financial), to place Volts on the road for a limited period of time.
The typical Chevy Volt lease will be for a term of 36 months. The federal tax credit is $7,500. The Volt has an electric range equivalent to about one gallon of gas per charge. During the course of the Volt lease, the lessee can save about 1,000 gallons of fuel compared to owners of fuel-efficient, gas powered vehicles that cost half the price. So, taxpayers are paying $7,500 to save about $3,750 (assuming $3.75 a gallon) worth of gas. When will this madness end?
I just don't understand why there has not been more public outcry regarding the wasteful green initiatives that are doing little to benefit average Americans. GM shareholders, as well, should question the company's strategy of spending tens of millions of dollars to market a vehicle that sells in such small numbers. The Chevy Volt has been the epitome of government's green-inspired taxpayer waste and it is a matter of common sense, not politics, that leads to criticism of the vehicle. Can proponents of the vehicle honestly argue that it is fair to use $7,500 of taxpayer money to put the car on the road for three years and save $3,750 worth of gas?
I didn't see any instructions on IRS tax form 8936 that required a minimum term for leases, so it may be possible for an even more wasteful two year lease to receive the credits. Even at the above described scenario of a three year term, the cost compared to benefits of the EV tax credits on the Volt are hard to defend. You do not have to be a Rush Limbaugh fan to see how illogically and wastefully taxpayer funds are being used to help prop up sales for the Chevy Volt.
For those out there who wonder why there is more criticism for the Volt than the Nissan Leaf, I didn't see Nissan hyping the prospects of the Leaf to garner support for a taxpayer bailout and then continue with the hoax that there is high demand for the car. I also did not hear the President of the US say he would be driving a Leaf in five years. If President Obama wants to be pitchman for the Chevy Volt as he campaigns on the perceived success at GM and tries to usurp even more taxpayer money to support the vehicle (as he has with his request to raise federal EV tax credit to $10,000) than it is understandable for critics of EV subsidies for the wealthy to focus on the Volt. GM's ridiculous disproportionate ad spending on the vehicle shines a further spotlight on the car.
Republicans as well as Democrats deserve criticism if they allow the waste to continue. I guess you could say that the criticism is political, since it is the politicians who continue to waste taxpayer dollars on folly that only benefits cronies (like GE which will buy thousands of the cars and sell charging stations) under the guise of a noble green cause. It is obvious that spending billions of taxpayer dollars to support cars like the Chevy Volt, which at the current price can not succeed with or without subsidies, is doing nothing to help average Americans who are not only paying the subsidies, but are continuing to pay for the higher price of gas at the pumps.
Mark Modica is an NLPC Associate Fellow.
This tax credit is for all EVs that qualify and includes the Chevy Volt and Nissan Leaf.
So, General Electric will once again benefit from being a major Obama donor.
The only flaw in this article is the assumption of saving $3.75 a day.
Electricty is not free; and, I estimate the average charge up to cost $1.50...based on 12-14 kwh, @ 12 cents a charge.
So the ‘savings’ on gas, over a 3 year lease is less than $2,500.
Also, since the Volt costs literally twice as much as a comparable compact, collision insurance coverage will cost more. And, I’m not sure who pays the personal property taxes on a lease...but somebody does...and those will literally be double, in those states with personal property taxes.
Good article. I just don’t want anyone getting the idea this thing will pay for itself in 5 years...it would take over a decade, assuming the battery holds out.
Which leads to another question on these leases - after 36 months, how much value will be left in these cars?
You’re correct. I believe Mark Modica was being liberal on the cost saving per day and giving them the benefit of the doubt. He’s been accused in the past by Volt lovers of misrepresenting the facts and sometimes downright lying which I know for a fact he’s not done.
You make a great point about the value of the Volt at the end of a 36 month lease, it will be nothing to write home about.
Thanks for the heads up Army Air Corps
The list, Ping
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I recently had the chance to ask Frank Weber who is the Volt vehicle line executive.
Would you say running air conditioning at high capacity will reduce your electric range in the Volt?
Can you say how much?
“It is so dependent on the ambient temperature and what your setting is.” (trying to dodge question)
How about maximum A/C on a hot day?
“We havent discussed that (publicly).” (oh, really. Why not?)
Will it be less than 40 miles?
“Absolutely. Physics are physics. Its like the electricity bill at your house. The moment you decide to switch the air conditioning on, it is a conscious choice that you will pay for it”
These cars are lemons. Who, in their right mind, would buy one of these abortions?
If the Chevy Volt follows the typical depreciation model for Chevy vehicles after 8 years, I'd guess 25-50% of the origional cost. If you use the Chevy Malibu as an example, it's close to 33% of the original cost. So, the Volt should be around $13,500 - depending upon condition, miles, ect.
The Volt Battery has a warrany for 8 years, after that the estimated cost is $8,000 to replace the battery. Now, if you had purchased a dependable Toyotoa Camry, after 8 yrs the car value would still be high - but let's say that you have an 8 yr old Volt and an 8 yr old Camry - and you put $8,000 into each. With the Volt, you get a new battery (assuming the batteries will be available, and the price for a replacment has not gone up, substancially). It is my belief that the $8,000 replacement battery is optimistic, due to the market's rejection of this product. Replacement batteries will be rare, and the law of supply vs demand will dictate that if a replacement battery can be had - it should be MORE than $8,000.
However, the Toyota Camry can be nicely updated with $8,000 put into it. Rebuilt engine/transmission, updated interior, stereo, new tires and fresh paint - with some left over for more upgrades. Meanwhile, the same old worn, dull and dusty Volt will have a shiny new battery.
Speaking of the second-hand market, consider that many of the used Volts will come from Federal fleets. We know those cars will be shagged-out by the time they are declared surplus. Imagine buying a former Federal fleet Volt.
Excellent comparison. Love your screen name BTW. Winter is coming.
True, I added note at end of article. Thanks.
Wait until the first Volt goes through a major wholesale dealer auction........it will I believe, sell for 50 cents on the dollar : )
Thanks, Mark. You’ve pointed out yet another scam regarding Government Motors and the Volt.
Sounds about right. I’m thinking about 20 to 25 cents on the dollar in three years when these things come off lease. Good time for Obama to buy one!
“Im thinking about 20 to 25 cents on the dollar in three years when these things come off lease.”
Yep....good call. I enjoyed your post.
Edsel anyone? : )
Ping for later
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