Chevy Volt price gouging? Report of dealer's $20,000 in extra charges.
A Los Angeles-area Chevrolet dealer is planning to charge $61,000 for a Chevy Volt. Some would-be Volt owners report that they have gotten similar responses from other dealers.
So you want to be the first on your block to own a Chevy Volt – the new plug-in hybrid from General Motors. Well, how much are you willing to pay above the $41,000 manufacturer's suggested retail price (MSRP)? How does an extra $20,000 sound?
Price gouging on hot new car models isn't exactly new. Just ask the first buyers of the PT Cruiser, Mazda Miata, new Beetle, and many others. But a Los Angeles-area Chevrolet dealer may have set a new bar for gouging – and set off a national debate.
In an e-mailed response to an Edmunds.com automotive pricing researcher, the unnamed dealer wrote (Edmunds.com redacted the dealer name):
"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 [to] only receive 9 Volts all of next year.... 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."
That Edmunds.com report earlier this month has provoked an online furor among would-be Volt owners. On the fan website GM-Volt.com, a poll among 1,312 Volt-o-philes Tuesday shows that 16 percent of the fans reported that dealers would charge more than MSRP for a new Volt. Of those polled, 135 said dealers told them they would have to pay $5,000 to $10,000 or more above the MSRP. Eighty-two reported dealers telling them the Volt would cost more than $10,000 above MSRP.
By late last week, the comment section of the Web page about the poll had amassed 229 comments, most of them hostile toward the dealers and GM.
"If a dealer is going to charge an additional amount (even $20,000!) for the privilege of me buying the car, and GM endorses that line of thinking, then the dealer and GM can just close up shop as far as I’m concerned," one writer opined.
Sensing potential damage from such hostility, the big Florida-based car dealer AutoNation last week issued a nationwide bulletin to its 27 Chevrolet dealers, telling them that if they charged more than MSRP, other than for dealer add-ons, they would be "subject to immediate termination," Edmunds.com reported.
GM, meanwhile, has announced it plans to boost US production capacity of the Volt in 2012 by 50 percent, from 30,000 units to 45,000 units, which may soften the price. GM is trying to get dealers to toe the MSRP line, spokesmen say.
"We don't control any pricing at the dealership. However, we have suggested strongly that they keep prices in line with what we have offered," says Rob Peterson, a GM spokesman, in an e-mail. The company has also reportedly been watching its dealers and can limit the number of Volts it allocates to an individual dealer if it chooses.
Still, some would-be Volt owners may decide against a purchase.
"It seems to me too harsh to say that marking up the price is ‘gouging’ in the sense of marking up the price of bottled water after a hurricane," wrote another commentator on GM-Volt.com. "A new Volt is nice but not something that is a life necessity. If the price is too high, the buyer is free to walk away."