GM Discounts Volt by $10,000, 3x-4x more than US average

Just today I got emails from three friends that drove my Volt in the last month asking where to get the same lease deal. $12/day, 15,000 miles per year, with no cash upfront and you don't have to bother with the IRS for a tax credit. makes it very simple and let's you skip the pump if it fits your drive.

 

First leases were Jan 2011, 36 months. There are some used ones in the market now. I know of someone that sold theirs as they were being deployed for 2-3 years and felt it better to sell than store it. And of course there are many dealer demos being sold as used.

 

Actually I would trust trucar.. but "reporters" trying to make a name for themselves, especially with the current political climate, that I don't trust.

I have no personal inside information, but if GM was giving 10K in incentives, it seems likely the actual sale prices would have been a bit better. Giving dealer incentives that work though to end-customers is not as effective.

 

The leases are available through US Bank and ALLY Bank, not GM. The leasing company paid something like $39K to the dealer to purchase the car. I got a 36 month lease.

I tried to do a lease through my local credit union, but when they tried to match the program from ALLY and US Bank they realized they couldn't make use of the $7500 tax credit, being a non-profit. Other than that they figured they could have made the same lease.

I'm not sure if the reporter is sincere if they are considering the $7500 tax credit a "discount from GM", of course with the federal government still a significant shareholder in GM, it may seem that way. Telsa, Nissan (Leaf) and Toyota (RAV 4EV) models qualify for the same $7500.

 

So the first leases should end around Jan 2014. Sounds like within a year, there should be enough Volts in the used market to be interesting.

We bought our first Prius in 2005, a 2003 model. But by then the NHW20 was available (and in dealer market.) So we're still looking at a couple of years.

Bob Wilson

 

If 3 yr old off-lease Volts hit the street in the $20K-$24K range, with 36,000 total miles and less than 10,000 miles on the ICE, they will be somewhat of a bargain for the next generation of PHEV owners. Of course most folks in this secondary market are still going to finance the puchase so it will be dependent on how the banks are doing, their valuation of the car, and the considerations that make for the purchaser's cash flow.

It took more than a decade for the banks to recognize the cash flow impacts of energy conservation improvements on homes and remodels. Less cash for energy bills frees up more cash for mortgage payments. The same hasn't happened yet for vehicles like the Volt and PiP.

 

What is the residual value on your very good deal lease?

 

Not that great, $24K I believe.

My math, which is warped like most of my thinking, tells me that I only got about 1/2 of the $7500 inside my lease and the other half is sitting inside the residual, ready to be stripped away for the off-lease buyer if needed. ALLY got the $7500 up front.

 

Reading this once again makes my stomach turn. Here goes GM's poor management making poor decisions again. It would not surprise me if they go bankrupt yet again. The Volt may be a great car but what is the price to the American taxpayer? This is almost (but not quite) as bad as the Fed buying $40b of mortgage debt every month until "the economy improves". Because of GM's past poor management, we (taxpayers) are on the hook to save the beloved UAW worker's pay and bene's. GM is not all bad but they always seem to make poor decisions. Now those decisions have come to a point where they affect every taxpayer. I say let the company die.

 

I tend to agree, but we should also recognize that GM has had to generally live within the rules given them by the government (you and me indirectly). The Volt has hinted that GM has managed to get the talent and engineering assembled to produce the product, they certainly have other business challenges, particularily in Europe.

It took me a decade to get past the "made in Japan" overhang before I got a Toyota. I decided I wasnt' going to wait as long on getting the Volt.

 

I find it difficult to guess how the used market is going to price cars that had the $7500 tax credit. Mostly I think people who bought the car and then go to sell are going to have a nasty awakening.

More interesting will be the used car prices of the cars coming off lease. Those cars will compete with new cars that are still subsidized with tax credit and however much discount GM adds on top.

It does not look pretty, but we should be used to GM tactics by now: move cars today, and let the government foot the bill tomorrow.

 

A $7500 tax credit and also the California CVRP really throws a monkey wrench into used pricing. I've observed it on mynissanleaf w/some people who had to sell, for one reason or another.

On the flip side, Nissan did raise the MSRP significantly on the '12 Leaf vs. the '11.

 

It shouldn't be too hard to guess. How did second hand Prii price when competing with new Prii that had a tax incentive? What happened when the tax incentive went away?

The manufactures tend to add features each model year that foil some direct comparisons between model years. Larger batteries, different battery technologies, more cabin features, faster charging rates, etc... will keep newer models aloft as the tax credits dwindle.

 

Way too different to draw a comparison.

1. Credit/deduction was much less
2. Demand tended to outstrip supply
3. Lease depreciation rates were far less artificial
4. Volume production ramped up
5. Different traction battery waranties for the CARB states, substantially less risk if the traction battery failed out of warranty.

These factors do not necessarily all pull in the same direction, but you are trying to compare an apple to a tomato because they are both fruit. Rather like the fools who expect the Volt to follow the sales trajectory of the Prius.

 

ok guys, put in your best guesses today for the average selling price of Volts that go off lease. I think the base Volt (40k msrp) will sell for $12 -15k, $13.5 median.

 

ok, back on the ignore list.

 

From the the OP article.

The susidizing for the lease is the $7500 tax.
We know of the $2500 for dealers.
There aren't any advertise cash discounts around me.
The low interest financing is a discount on the loan. The manufacturer is giving up profit there, but unless there are other discounts, the car is sold at MSRP. It's a discount that doesn't actually lower the car's price.

It appears GM is only giving a discount of $2500 themselves off the Volt price through the dealer discount. The tax credit is funded from the government. Dealers might have their own incentives, but they likely hinge on the bonus from GM. So, nothing to see here.

 

Who is discounting the loan? I don't think it is GM, I don't think GM does consumer car financing any more.

In general, secured consumer loans are extremly inexpensive at the moment. Just papered one today at 1.5%, $35K.