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

Ally (the bank I assume is financing the discounted loan) is the new name for GMAC financing. So in a roundabout way, it is GM giving a bigger discount. The people I feel sorry for are the early birds that jumped on the Volt and paid full price (minus the taxpayer incentive). Unless they are able to keep the car for about 10-12 years, they will lose their behinds.

 

Thank you. Less noise from you, more bandwidth for everybody else.

 

They list one for the Camero on their site, and saw a dealer offering one for the Volt.

While a low interest loan means somebody isn't making the money they could of, it isn't an amount discounted from the sold price. A Volt sold at $40k with 0% financing is still $40k in GM's pocket.

 

Interesting but the name is Ally for a reason.. during the crisis GM losts its role and not GM has only a minor financial stake in Ally. GM trust (which is not even operational GM) has only a 9% stake. The biggest shareholder is the US treasury which, as of Aug 2012, had been paid 5.7Billion in terms of dividends and sale of preferred securities.
Ownership Structure | Ally Financial| Ally Financial


Well I do plan on keeping mine for 10-15 year, so I am not wirried. But for used 2011 volts sold so far the price has been good. The kelly-blue-book used price is 32K (based on actual sales), see

Kelley Blue Book


Not a bad retention of value so far. When the 10000 leases come up that could change.. but total "sales" including leases in the first year was 7K.. so that will not happen too fast.

 

So Drinno, what you're saying is, the taxpayers also bailed out GMAC financing and we're taking another hit for the Volt (and other GM products). Now I'm really sick to my stomach.

 

They only lost out on the $2500 cash bonus to the dealer, and that wasn't a guarrantee depending on the dealer.

The bulk of the $10,000 discount in the headline is from the $7500 tax credit applied to the lease, which isn't money coming from GM. If someone got a low interest loan, that money is coming from the lender, but that isn't really lost to a discount. It's money that could been. Same as if a person paided off the loan early or didn't borrow. GM isn't listing any cash back offers for the Volt on their site. That just leaves the dealer bonus for discount coming out of GM's pocket.

 

There has not been signs of rapid depreciation of the volt, but it has not been selling enough years to really know. Ally financial is the holding company that makes the loans. It is partially owned by GM, but majority owned (73%) by the US government, because of sub prime mortgage loans from the bank. Ally gets the tax credit ($7500), and is on the line for residual value of leases. The volt is not a large part of the loan portfolio and losses here won't make much difference to a company with almost $200B in Assets. Ally financial is part of that public risk, private profit problem with tarp though.

Ally financial will often get discounted obligations from gm, especially with 0% financing and the riskier loans. Interest rates are quite low now though. On a lease for a $40K car, ally will be financing that amount less the tax credit.

 

If there is a $10k discount on Prius PHV ($32k - $10k = $22k), I'll run out and trade in my 2006 Prius.

 

Austin and Trollbait,
I appreciate your knowledge of all this. It really helps us all see the big pic. Thanks for sharing and umm, correcting my assumptions.

 

There likely are $6K discounts for those in california if you do the math the same way
$32K - $2K dealer discount -$2.5K federal tax credit - $1.5K state tax credit = $26K including HOV. Which is not too shabby. For those of us not in California the deal isn't as good.

 

I don't understand your logic. GM is not getting any additional taxpayer money, are they?
The bailout is done, already been paid. GM actually paid back the bailout part of the loan. On the purchase of stock, the taxpayers are being paid a dividend until the government sells the stock. Hopefully it will be at a profit, but as of now, if they sold it, it would be at a loss.

So, if you really are sick at the idea of a loss to the taxpayer, perhaps you should buy GM products, or stock??

 

Pretty sure that ALLY (formerly GMAC) is not part of GM.

I don't think US Bank is part of GM either.

As far as "lose their behinds" I think they are probably saving enough in gasoline to offset any losses. I know I am saving more on gasoline than I am paying for the lease.

 

Does anyone know where on truecar.com it claims there's this "$10K+" discount? It keeps getting cited. It's annoying that even today, articles like these still keeep claiming that:
Volt Sales Come at This Cost | Wall St. Cheat Sheet
GM's Chevrolet Volt : The Big Gamble - GM, NSANY.PK, TM - Foolish Blogging Network

The latter still claims the questionable

which he then uses in:

I wonder if GM's issued a rebuttal or if any of these writers have realized are likely fictional and whether they'll do anything about it.

 

One clarification for the Volt fanbois: Criticism of the $40k USD non-subsidized cost does not remit when GM piles on discounts because the intent is to see an affordable car, that is profitable to GM.

Setting up the next bailout is not going to get my vote. Likewise I have no wish to subsidize the car even futher through Ally or any other quasi-governmental loan agency. Let's count the ways this car is a failure:

$7500 per car subsidy
Untold milliions ?billions funneled to GM as part of modernization strategy
Further losses hidden through sub-prime loans handed out by a majority owned government business
Additional losses incurred by GM directly to move inventory
Periodic factory downtime to align inventory with depressed market demand
Government puchase of cars to hide market failure

Face it folks, the Volt is a boondoggle. Let it die, and then stop propping up GM.

 

Actually its never been stated that GM expects to make a profit directly from the Volt in its first generation, nor would someone looking at new technology really expect it. The volt was is to launch new technology for future generations, rebuild their image in technology, especially green technology and bring in new customers. It has many roles, not just a direct sales items, and has according to a relevant quote in a recent AP article

In my view as GM a company that spends 4Billion (with a B) on marketing, they could write off the Volt lossess as a marketing expense and still declare a profit. The amount of media discussion and awards is worth a lot of "media" buy money. So you can say you believe it has to make a profit now, but that is not a realistic expectation and in my view is short sighted. If the prius has to make a net profit in the first decade after it was conceived it would have been killed.

Yep Bush pushed for $7500 credit per EV car, before the cars were introduced. Investing in future tech is important for America. If japan government had not invested in the furture via the Prius, there would be no Prius or PC chat.

Can you details/citations of the sub-prime loans?

Do you know the Cruze plant has been closed to align supply and demand? Same for the Malibu plants? Closing a plant, just once is about the difference of capacity and demand. They could just go slow, like the corvette plant, which produces less cars this year, but the wanted/needed to also see about how they scale up to higher volume before they really need it. It is interesting that GM has not idled its only impala plant in Canada, because they cannot as they face serious union pressures and its only made in that one plant.. at least until the current shutdown is finished and the Hamtrack plant is retooled to be able to make impalas as well.

What is your source? Last report with actual numbers I recall, DOD/Government purchases were < 1% (about 130) of total volts, and they have > 200000 cars in their fleet.

In the broader "fleet" sales question, which is another myth, of the 2,800 volts sold in August in the U.S. only 100 went to fleets. See more about the myths being used to bash the volt at
Five myths used to bully Chevy Volt sales

 

Actually, it has never been stated that GM *ever* expects to make a profit from the Volt. LOL

And if they ever do write the work "expect," who cares ? Forward looking statements are worth a pompom girl's confetti.

So there you have it -- an exit strategy such as it is.
You can always find loopholes in statements, or worse comes to worse take advantage of the time tested lawyerly "what I said is not what you think I meant."

I read blurbs every day for years from GM and it's propaganda machine how the Volt was the do or die car of the new GM. Now it's apologists are happy with the possibility it is a halo.

Whatever. Just return my tax dollars, stop the ongoing multitudes of subsidies, clean up the pollution, and I will be *delighted* to erase GM from my memory.

 

Two more friends emailed me and are getting Volts after seeing this latest round of opinion pieces.

It seems this article has folks thinking they are getting a better deal now than what was available earlier in the summer and they want to get in on it in case it goes away after the election.

 

Actually I'm mostly happy I got to buy one. That its was mostly a halo was expected by those of us that looked into what it was and that understand innovation processes. But I do believe it was/is do-or-die not because of the car's profit now but because of it future impact and because its critical for their image. Having Corvette as a halo no longer works for them, and the EV fiasco burned them bad. They have to regain ground on Toyota, and leap-frogging the Prius was considered important in that fight. The future of cars, long term, is going to have to inclue EV of some form and GM needed to find a way to show it can do engineering well. They did. Now they need to show they can consistently build quality and then drive down the price.


I'll fight to help get your tax dollars back and stop the EV subsidies as soon as they return the taxes for oil-wars and the stop the oil company subsidies. (and after they fix the lax regulations that lead to the collapse in the first pace, and after the fix the broken education funding and....)

 

There is no possible way I would buy GM products or stock. There is a reason they had to be bailed out and that's due to poor management. Management that doesn't have enough courage to make the hard decisions. Then (even though they were "bailed" out), they still filed for bankruptcy. I'm sorry but that's not a company I would invest in nor would I recommend investment to anyone. I see no indication that the management at GM now is any better than in the past.

Yes, the bailout is done, paid for with borrowed dollars (so we're still paying for it and will be for quite some time. For all I know, our kids will pay for it). by you, and me (the taxpayers). And it is a loss to the taxpayer because we bought the stock at way too high of a price and it will never reach that level again.
I hope this helped you understand my logic.

 

Thank you SageBrush. Very well said.