Tuesday, May 01, 2012

Chevy Volt: The Only $41,000 Car In the World That Leases for $350/mo., Courtesy of... You

According to Investors Business Daily, the special inspector general overseeing the TARP bailout says that GM and its lending arm still owe taxpayers more than $40 billion.

GM ... still owes more than half the $50 billion in federal funds it received when the combination of the recession and its costly union contracts drove it into bankruptcy. And its lending arm, GMAC (now Ally Financial), still owes $14.5 billion...

...What's worse, it's not clear that GM actually repaid what it's gotten credit for repaying. Check out this note buried in the inspector's report: "As part of a credit agreement with Treasury, $16.4 billion in TARP funds were placed in an escrow account that GM could access only with Treasury's permission."

As it turns out, GM got Treasury's OK to "repay" more than $6.7 billion "using a portion of the escrow account that had been funded with TARP funds." So GM is merely paying the government back with government money, not money GM is earning selling cars, as the administration has claimed.

Worse, GM in effect is still borrowing money. Consider this item from the report: "What remained in escrow was released to GM." Bottom line: Taxpayers have not been paid back and are still on the hook as GM continues to require government help. Yet Obama has hailed the GM bailout as the signature achievement of his big government programs.

As if to illustrate the administration's lies, a friend checked out a lease on a Chevy Volt (MSRP: $41,000). He reported back that the car leased out at $350 a month for 36 months!

I figured he had to be lying. After all, he's a Dem. But, it turns out, he wasn't fibbing a bit.

...although most of the world will surely report on how the Volt MSRP of $41,000 puts it out of the reach of the average consumer, ... the real story is the fact that, if you lease the Volt, it will cost you the same as leasing a LEAF: $350 a month for 3 years.

That certainly makes things interesting, doesn't it?

...So how did GM make the Volt available for the same lease price as the LEAF given that the Volt's base MSRP is $8,000 higher than the LEAF's? For starters, when you lease a plug-in car from a manufacturer, the manufacturer can take the available $7,500 federal tax credit for themselves and roll that into paying down the MSRP. Add to that the Volt's $2,500 down payment, and now you're paying a lease on a $31,000 vehicle instead of $41,000...

The magic all comes down to the manufacturer's calculated residual value—how much they think the car will be worth at the end of the lease. GM has made the calculation that the Volt will maintain a very high value over the first three years of its life. As a result, GM has effectively engineered a situation where the vast majority of Volt buyers will decide to lease the car. Twinges of the EV1 days will surely flit through the minds of the old school California mandate folks when GM took all the EV1's back at the end of their leases and crushed them...

In other words, GM loses money on every car, but they make it up in volume.

Or, by filching money from the taxpayers while claiming all of their loans were repaid.

This, my friends, is lawlessness, but not unexpected coming from the parasites infesting the Democrat Party.

6 comments:

Barry Popik said...

Origin of “We lose money on every sale, but make it up on volume.”

The blog Zero Hedge has been documenting GM's channel stuffing (unsold cars on GM lots) for some time. Why is the U.S. Government giving people $7,500 to buy a Chevy Volt? Why is GM not paying any taxes at all? The more you look, the more corrupt this thing appears.

The standard policy that the U.S. Government has no business (or Constitutional authority) to pick winners and losers in the free market should have been followed by any government official sworn to uphold the Constitution.

@BobbleHeadGuru said...

1. "Why is the government giving $7500?" ... Ask the originator of the tax credit: George W Bush in 2007. Or ask his dad, who was the FIRST president to buy one.

Perhaps the answer is that we should give some semblance of parity "for show" since we give $100,000,000,000/year to big oil... and we make F-16s at will for $22,500,000 (3000x the electric vehicle tax credit)... which we use to wage wars that remarkably always seem to have a stake in the oil industry.

I have an idea, let us have a level playing field. However, to do that, we have to end Big Oil subsidies (which means an end to the gravy train of campaign $s from oil companies) or RAISE the tax credit to $25-50K/car.

2. The lease offer has been out for some time. But buying the car still may be a better deal. The effective price of the car when you factor in fuel savings over 5 years is $24,045.

3. I can only speculate that your FAKE flaming Volt picture had to be created because there have been ZERO reports of any Volt catching on fire during a crash...(Your google searches could not find an actual car, huh)... unlike 200,000+ car fires per year with Internal Combustion Engines.

What car do you drive? I am confident that unless it is a Volt or a Leaf, I can find a "car-b-que" picture of one in 2 minutes on the internet.

Mike said...

Apparently, BobbleHeadGuru, that's what happens when you lie in the back of a Volt, gazing at the clouds and freebasing.

It wasn't end well for Ricky Nelson's airplane, and it didn't end bad for our fraudulently-depicted EREV friend here, either.

DRUGS KILL, PEOPLE!!

Mike said...

It has come to my attention that the NTSB subsequently refuted the post-crash claims that freebasing caused the Rick Nelson plane crash.

My apologies to Mr. Nelson and his traveling companions, for any perceived disparagement. Chalk that one up to yet more misleading press (what a concept!).

Nevertheless, the picture of the burning Volt is still complete bullsh!t.

-----

PS. My prior post should say "didn't end WELL for..." not "didn't end BAD for..." Hasty editing, and not drugs, was to blame :-)

Anonymous said...

Democrats? My Dad and his pals are stauch Michigan Republicans all with careers in the auto industry. They despise Obama and liberals but think the auto bailout and the Volt are great. Go figure. I'm over 50 they, the honored ones, are in their 70s and I'm not going to lecture them in psychobable about cognative dissonance like I would have back in 1982. I guess the old guys are just RINOs after all? But what about the free market, Dad? At least Romney gets it.

Jamie McKaye said...

Fantastic post, thanks very much. I saw some pretty good deals on car leasing at http://www.autoplan.co.uk - check them out.