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Pre-production Chevrolet Volt  (Source: General Motors)
AutoNation isn't down with $20k markups on the Chevrolet Volt

It's no secret that the Chevrolet Volt is generating a lot of positive attention from those in the automotive industry (not to mention prospective buyers). The vehicle has also had its share of criticism, with the latest dustup surrounding the vehicle's price tag.

The base model Volt is priced at $41,000 before a $7,500 federal tax credit while a fully loaded Volt will run you $44,600 (before credit). Many people, including our readers, balked at the relatively high price tag for a Chevrolet-branded compact sedan. The pricing concerns became even more apparent when it was revealed that some dealerships were charging a $20,000 markup for the vehicle.

AutoNation, a Florida-based company which owns 230 dealership in the U.S., has thrown its two cents into the debate. The company owns 27 Chevrolet dealerships across the country and recently told Edmund's Green Car Advisor that any of its dealerships that charge over MSRP for the Volt will face immediate contract termination.

It should be comforting to potential customers that AutoNation is taking such a firm stance on this issue, but the few dozen Chevrolet-branded dealerships that the company owns is a just a drop in the bucket compared to the thousands of Chevrolet dealerships across the U.S. AutoNation's 24 Nissan dealerships should also take note; the same termination policy also applies to the MSRP of the all-electric Nissan Leaf.

The Chevrolet Volt has an onboard lithium-ion battery pack which can power the vehicle for 40 miles (under ideal conditions). Once the batteries have reached a pre-programmed "maximum use" state, the gasoline generator kicks in to power the vehicle for another 300 miles.

The $32,780 (before credit) Nissan Leaf, on the other hand, only makes use of a lithium-ion battery pack and has no generator backup. As a result, once the 100-mile range of the vehicle is exhausted, you had better hope you're near a charging port or be prepared to call a tow truck.

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Nissan Volt?
By smackababy on 8/13/2010 2:55:16 PM , Rating: 2
Typo a few times about the Nissan "Volt".




RE: Nissan Volt?
By Brandon Hill (blog) on 8/13/2010 2:57:57 PM , Rating: 2
I need some Beano, had a brain fart ;-)


RE: Nissan Volt?
By The Raven on 8/13/10, Rating: -1
RE: Nissan Volt?
By YashBudini on 8/14/10, Rating: 0
RE: Nissan Volt?
By The Raven on 8/18/2010 3:39:33 PM , Rating: 2
Oh no not you...


RE: Nissan Volt?
By Modeverything on 8/14/2010 11:40:36 PM , Rating: 1
quote:
Where did that term come from?


I saw a commercial that described a "brain fart" as an involuntary release of ignorance. Kinda like saying something dumb without thinking, even though you know the right answer.


RE: Nissan Volt?
By webstorm1 on 8/16/2010 9:18:40 AM , Rating: 2
Actually, that isn't correct. A brain fart is when you are trying to think of the correct answer but it goes out your ear instead of coming out your mouth. So, you know the answer but you can't think of it.


RE: Nissan Volt?
By marvdmartian on 8/16/2010 10:19:07 AM , Rating: 2
It was easier to say than "cranial gas expulsion", that's all. ;)


Expect a lawsuit over this ultimatim
By Lerianis on 8/13/2010 5:47:54 PM , Rating: 3
Since the last time that AutoNation or someone like them tried this, they got sued over it and it was settled out of court.




By ssjwes1980 on 8/13/2010 9:47:03 PM , Rating: 2
I think since the Gov. has a hand in it they wont try
that option or at least make them think twice about it.


RE: Expect a lawsuit over this ultimatim
By SunAngel on 8/14/2010 1:14:45 PM , Rating: 2
quote:
The company owns 27 Chevrolet dealerships across the country ...


Is it possible to sue yourself and win?


By ssjwes1980 on 8/14/2010 1:56:08 PM , Rating: 2
yes
you can sue your own insurance which in essance sueing yourself


Prius
By Homerboy on 8/16/2010 9:41:36 AM , Rating: 3
If I recall, the Prius used to go at a premium when it was 1st introduced too correct? It was THE status symbol car to have amongst the socially correct. THey still sold like wildfire and you couldn't find them in stock anywhere... time marched on, production ramped up, public interest grew and grew and now the Prius is available at MSRP for anyone to pick up.

Why would this be any different for GM? I don't see why the dealership mark up should be stopped. This is the fundemental princple of Supply and Demand. Let the market sort itself out.




RE: Prius
By Jaybus on 8/16/2010 12:54:09 PM , Rating: 2
Absolutely. GM will do as Toyota did with the Prius. Both were venturing into new territory. Toyota didn't immediately dive in head first. They first tested the waters. Once Toyota saw the demand was there, they ramped up production as quickly as possible, but in the beginning, they weren't sure the Prius was going to be a hit.

GM is doing the same thing, which is the logical choice. It is still unknown as to how well the Volt will be received. If it truly sells out, even with a markup, then they will fall over themselves cranking up production, every Chevy dealer will have plenty of Volts, and salesmen will sell below MSRP or else lose sales to their competition.

Likewise, if the Volt concept does well in the market, then all other manufacturers will be quick to make their own Volt-like vehicle, and those Chevy dealers will soon find themselves competing on multiple fronts and any thought of a markup will be out of the question.

In any case, smart dealers won't waste their time and money with a car that won't sell. If few people bite on the $20k markup, then they will soon reduce the markup to get the car off of the lot. As always, the consumer will decide.


RE: Prius
By Drag0nFire on 8/16/2010 2:53:24 PM , Rating: 2
quote:
amongst the socially correct


A saw a Prius in the parking store the other day with flower decals running along both sides and the back. I didn't know it was possible to make a Prius more hippie than it already is...


Ideal Conditions
By gregpet on 8/16/2010 3:32:00 PM , Rating: 2
Since you felt it necessary to list the Volt's range as 40 miles (under ideal conditions)

"The $32,780 (before credit) Nissan Leaf, on the other hand, only makes use of a lithium-ion battery pack and has no generator backup. As a result, once the 100-mile range (under ideal conditions) of the vehicle is exhausted, you had better hope you're near a charging port or be prepared to call a tow truck."

The irony is that the Volt's battery is heated and cooled to increase performance while the Leaf's less sophisticated battery performance will swing wildly depending on the environment!




RE: Ideal Conditions
By shin0bi272 on 8/16/2010 8:31:46 PM , Rating: 4
Thus you have discovered the downfall of EVs everywhere. They all suck and the only reason they are even being made is the huge panic everyone has been put in by the government and the ad council pushing this idea that if we dont get off gasoline the world will end tomorrow.


Glad the car thugs are getting payback
By MartyLK on 8/14/2010 10:08:47 PM , Rating: 2
This pleases me. I know the types that run car dealerships in the USA and they are all crooks, basically. Nothing but a bunch of low-life, hick-ass, slack-jawed idiots...not all of them, but most of them.

I'm glad to see someone shoving a pole in their rear.




By Dorkyman on 8/22/2010 2:56:23 PM , Rating: 2
I would assume from your comments that you have never taken an Econ class in college.

There's something called the "Law of Supply and Demand." And it's a good thing, not a bad thing.


Do what you're told
By shin0bi272 on 8/16/2010 8:36:55 PM , Rating: 3
Do what government motors tells you or they'll take away your tax credit for buying a "green" vehicle and send the SEIU to your house.

"We took names, we watched how they voted, we know where they live" - Andy Stern head of SEIU




ok, fine
By TechIsGr8 on 8/16/10, Rating: 0
RE: ok, fine
By TechIsGr8 on 8/16/2010 7:52:59 PM , Rating: 2
Message to AutoNation from consumers: Sell at MSRP only, and we won't buy from you, nor will we use your dealer network for any vehicle service.


Not a real threat
By Ammohunt on 8/16/2010 3:56:42 PM , Rating: 2
if i were one of the dealerships i would jsut refuse to carry the car in my inventory; which would be a good idea anyway since this car is going to flop big time like Pontiac Aztec big.




Charging time?
By Belard on 8/17/2010 4:47:12 AM , Rating: 2
How long does it take to recharge the car? I gather a standard wall outlet wont work. What is the electric bill for a 100 mile charge? With a typical gas CAR @ 25mpg = $10.

This is very new tech, with continued advancement of batteries (another article talks about 85% improvement over the costs of batteries). And improvement with solar collectors... perhaps in 10 or so years, we could most power our cars for free (which means somebody isnt making a profit).




typo
By collegeguypat on 8/13/10, Rating: 0
RE: typo
By YashBudini on 8/14/10, Rating: 0
Stupidity knows no bounds.
By YashBudini on 8/14/10, Rating: 0
ok, fine
By TechIsGr8 on 8/16/10, Rating: 0
Supply and Demand
By Schrag4 on 8/13/10, Rating: -1
RE: Supply and Demand
By mcnabney on 8/13/2010 3:34:24 PM , Rating: 5
Why should the dealerships win big?

What did they do to earn this big markup? Nothing. Screw them. They are just another greedy middleman that contributes nothing to the actual product that thinks it deserves most of the profits.


RE: Supply and Demand
By quiksilvr on 8/13/2010 4:21:59 PM , Rating: 5
Agreed, but it is still up to the responsibility of the consumer to check the MSRP and make sure they aren't getting screwed over as well.

And a note to the DailyTech team,

This is my 1000th comment on your site. Thank you for all the great news and articles (and yes, even Jason Mick's biased and sensationalist articles. They were quite entertaining and led to quite comical threads on the site).

May you guys continue to thrive and give us the news in the (mostly) professional manner that is absent on other sites.


RE: Supply and Demand
By Lerianis on 8/13/2010 5:50:09 PM , Rating: 2
How many people in R E A L I T Y are going to do that? Not many. There comes a time where you have to realize that most people don't have the time nor energy to go out and check these things, and you have to be proactive.

Maybe by putting the MSRP on PRICE LABELS, we can get around this!


RE: Supply and Demand
By Zoomer on 8/13/2010 5:58:38 PM , Rating: 2
After putting up all the "required" labels that everyone would like, the car would probably look like its made of paper and glue.


RE: Supply and Demand
By Reclaimer77 on 8/13/10, Rating: -1
RE: Supply and Demand
By Lerianis on 8/13/2010 11:05:21 PM , Rating: 1
I find that hard to believe, seeing as how the 'labels' that people push for are very simple. In fact, it is not outside busybodies who usually make car manufacturers add labels to stuff that should be common sense (like the old "Do not touch! May be hot after use!" on engines).

It's the manufacturers themselves trying to stave off lawsuits that should be thrown out as soon as a judge sees the papers.


RE: Supply and Demand
By Mozee on 8/14/2010 1:39:58 PM , Rating: 4
You guys do realize that every new car does have the MSRP right on the Monroney sticker (window sticker), right? You know, the giant sticker that usually blocks the entire passenger window of the car with the mileage, standard and optional features, and pricing? It's required by US law to be on every new vehicle.


RE: Supply and Demand
By maverick85wd on 8/14/2010 12:56:41 PM , Rating: 2
nice work on 1000 comments, I'm about 1/3 of the way there ;-)


RE: Supply and Demand
By torpor on 8/13/2010 5:23:01 PM , Rating: 1
Because it's impractical for GM to run all the distribution and sales nodes around the country when they should focus on building cars people want.

Because it spreads the car company's inventory risk across multiple independent businesses.

Because it seperates the ugly purchasing and service experience from the car company itself.

And, because they can.

If you don't like it, build your own car company and do it your way.


RE: Supply and Demand
By torpor on 8/13/2010 5:56:45 PM , Rating: 3
UAW Local 1111 - Automotive Salesmen
UAW Local 2222 - Auto Mechanics

Just think what the Chevy Volt price would look like with the above.

'Cause if the entire dealer network was part of GM as one national company, don't doubt for a minute that it would happen.

Would you like to haggle with a union salesperson?


RE: Supply and Demand
By Schrag4 on 8/13/10, Rating: -1
RE: Supply and Demand
By YashBudini on 8/13/10, Rating: -1
RE: Supply and Demand
By Spuke on 8/13/2010 8:39:36 PM , Rating: 1
quote:
They are just another greedy middleman that contributes nothing to the actual product that thinks it deserves most of the profits.
Well, they do sell and service OUR cars. I suppose we could get that done at the local Walmart.


RE: Supply and Demand
By darkblade33 on 8/15/2010 1:20:28 PM , Rating: 2
When the Volt cost that much no one wins except the dealership!

Buy a $18k-26 car that gets 30 to 50 miles per gallon and finance it.. Go buy a car that 41k, deduct 7k ( govt rebate), then add a markup of even 10k at the dealership..

Financing a car at $40k versus a car thats around $20k = A monthly car payment high enough to delete any money savings advantage at the pump ( from the mileage advantage) !!

If you're the typical person you will either get NO savings from your pocketbook, even with the great mileage, because your car payment will be so high you could even lose money !


RE: Supply and Demand
By Schrag4 on 8/16/2010 9:42:55 AM , Rating: 2
quote:
When the Volt cost that much no one wins except the dealership!


That's not true. If they move cars at that price, then obviously some customers feel like they're "winning".

quote:
If you're the typical person you will either get NO savings from your pocketbook, even with the great mileage, because your car payment will be so high you could even lose money !


If you're the typical person, there are few enough of these things that even if they sold them for 10 bucks per car, you're not going to get your hands on one. That's why they can mark them up and they'll still sell. Supply and demand. For some reason, there are enough people out there that want one of these cars even if they have to pay so much that they'll never realize any savings in the long run. Let those people get the first few at a huge markup. Then once they ramp up production a bit, get one for yourself at a more reasonable price.

Hell, the rest of the consumers "win" when the early adopters pay ridiculous amounts of money. Sure, this money stops at the dealership (meaning it doesn't go towards R&D), but that might just keep some of these dealerships alive, which is a good thing for GM, which might keep them from having to scrap the Volt. Those car dealers might just decide to drop so of that ill-gotten cash at your place of business. It's all generalities and hypotheticals, but can't you see how letting the early adopters pay through the nose helps the "typical person" like you and me?


RE: Supply and Demand
By omnicronx on 8/13/2010 3:54:57 PM , Rating: 2
Do you really feel its a good idea for GM right now though? They need the average American to believe that the Volt technology has a chance to trickle down to their pricepoint sometime soon (Does anyone find their current vehicle lineup compelling in any shape or form?). At 60k for a vehicle that will be in high demand for the next few years, I just don't see that happening.

People are losing confidence in GM vehicles and they desperately need a jump start. I fail to see how curtailing to those who probably would have never bought a GM vehicle in the first place (i.e those looking to spend 60k+ on a vehicle) helps them accomplish that feet in any way.


RE: Supply and Demand
By Reclaimer77 on 8/13/10, Rating: -1
RE: Supply and Demand
By MadMan007 on 8/14/2010 11:28:50 AM , Rating: 2
Having discussed this with a lot of the people I know you have a rather twisted view of what the 'average American' thinks.


RE: Supply and Demand
By Reclaimer77 on 8/14/2010 7:43:32 PM , Rating: 1
quote:
Having discussed this with a lot of the people I know you have a rather twisted view of what the 'average American' thinks.


If I may play devils advocate, I would wager your sample of "lots of people" you know and making an assumption based on that, is just as fallacious as my "twisted view" of what American's think.

Obviously you don't remember what a HUGE controversy the bailouts were. If you actually believe the majority of Americans are in favor of the Government using tax money to buy up/bailout/whatever you want to call it - failing companies, that's your business. But I feel very confident, and stand behind, my assertion that the opposite is the case.


RE: Supply and Demand
By YashBudini on 8/14/2010 8:22:49 PM , Rating: 1
Well a good example of twisted is when you get all bent out of shape about ad hominem attacks against you but it's totally OK when you do it to others.

But then where would you and your fellow Cool-Aid drinkers be without hypocrisy? And to prove this point, the antic you always resort to it to attack Obama, which I have never said anything positive about or voted for, but apparently the 2 wrongs make a right logic makes it OK. But that too is typical of your group, when caught in a bad position you never offer any explanation, you will repeat something Limbaugh or Hannity said or you simply throw a most conventient temper tantrum. That's what's fun about people like you, point out the slighest little fallacy that you believe in and next thing you know you're acting like one of the great Crusaders, ready and willing to burn everything to the ground.

I'm so glad high blood pressure kills people because you ain't ever going to see old age the way you're going. Don't believe me? Ask your doctor.

Bailouts - Had the crisis started 5 years sooner the exact same thing would have happened, except you would have blamed Clinton in some form of Beck-like logic.


RE: Supply and Demand
By YashBudini on 8/14/2010 8:49:12 PM , Rating: 2
quote:
I know you have a rather twisted view of what the 'average American' thinks.


Too many people like yourself stay silent around here, allowing the inmates to run the asylum.


RE: Supply and Demand
By mindless1 on 8/14/2010 3:29:43 PM , Rating: 2
The average american believes whatever biased spin is put on their local news station reports.

The smarter american is more angered by paying money to bury CO2, by the nonsense that we should let oil leech into the ocean instead of relieving the pressure by pumping it out, and that america is no longer the country founed on the principle of freedom to make one's own choices on basic things like do I want to take a bottle of shampoo on the airline or have my, or my nuts irradiated while goons check them for explosives, or my pockets searched for nail-clippers if I enter a school or government building with a metal scanner, or not being able to have a shed in the back yard or more than one dog/one cat because some overzealous busy bee in the subdivision has re-written the developer's guidelines to include terms nobody agreed to when buying a home.

America is gone because everyone wants to think they are entitled to force their opinions upon others instead of minding their own ****ing business.


RE: Supply and Demand
By Dr of crap on 8/16/2010 8:49:11 AM , Rating: 2
O M G - thank you - a voice of reason in this crap soup
I could care less if some a-hole wants to loose money buying a car called a VOLT.
A fool and his money.......
I will not buy a new car. It's a thing to move you around and maybe haul stuff.
It won't make you any money - it sucks money from you.
It's called a libility - not an assest!


RE: Supply and Demand
By mindless1 on 8/14/2010 3:22:12 PM , Rating: 2
Perhaps, but we have conflicting sentiments. There is the group that feels the government shouldn't have bailed them out - certainly this group should not feel that in a free market there should be price-fixing on a government subsidized automobile.

Then there is the other camp, those that want their pie and to eat it too. They don't want to pay the taxes they do, they want everything at a magic low price that doesn't reflect supply and demand, but they still want the goverment to spend OTHER people's taxes on things that benefit THEM.

Perhaps I'm stereotyping a bit too much but it would seem that very few people take a rational middle ground (like not buying a volt, it makes no sense in today's economy, makes no appreciable dent in the environmental impact, and is inferior at it's core purpose - transportation).

Electric cars are our future, but that doesn't make the tech ready to deliver them to the masses. I mean core tech that doesn't depend on automotive industry research and revenue, like better robotics to reduce assembly cost and improve quality (and reduce labor union costs), and markedly improved battery power density.


RE: Supply and Demand
By MrTeal on 8/13/2010 4:44:31 PM , Rating: 2
I'm split on this issue.

For GM, I would think that they should be doing a similar with all dealerships - charge MSRP or we don't renew your dealership license. Given the fairly low volume compared to the publicity this car is getting, it's important that the public sees the Volt (and GM by association) as the future of the industry. That's a lot harder to do at $60k than at $40k.

However, even if the dealers are forced to keep prices at MRSP the price will jump if demand is strong enough. People will just purchase them to resell at a markup. You don't often see it with cars, but if people are willing to pay $20k over the list price for a Volt, someone will sell it to them. No different than a ticket to the Superbowl; the price on the front really doesn't mean much at the end of the day.


RE: Supply and Demand
By Spuke on 8/13/2010 8:37:42 PM , Rating: 2
quote:
For GM, I would think that they should be doing a similar with all dealerships - charge MSRP or we don't renew your dealership license.
GM could do that and possibly get sued if they followed through. Tight rope.

quote:
However, even if the dealers are forced to keep prices at MRSP the price will jump if demand is strong enough.
Yep, you'll just transfer the "mark up" to private individuals. I wouldn't be surprised if groups of people got together, bought all the allotments, and resold them at higher prices.


RE: Supply and Demand
By tdawg on 8/13/2010 8:51:28 PM , Rating: 2
If the Volt sells from dealers new at $40k, why would people spend $60k on a used one? They'd just wait until dealers got more in stock. It's not like these are going to be a limited run and then they'll never be made again (unless they suck and GM goes out of business this time around).


RE: Supply and Demand
By Spuke on 8/13/2010 9:26:41 PM , Rating: 3
quote:
If the Volt sells from dealers new at $40k, why would people spend $60k on a used one?
Because they wouldn't be able to get one!!!! Dealerships get allotments. Dealerships get customers. Customers are matched to the allotment. This is a niche, low volume car. It won't take much to run out of allotments. All you need are groups of individuals that get together, hit up the dealerships that have the allotments (niche car..not all dealers will get them) and buy all of the cars.


RE: Supply and Demand
By futrtrubl on 8/13/2010 11:14:50 PM , Rating: 2
What's the amount a car devalues right after its first sale? 25%? Doesn't matter if it's an actual loss of value, it's a bargaining point a potential (re)buyer can use. I guess that then makes it an actual loss of value.


RE: Supply and Demand
By Spazmodian on 8/13/2010 11:40:51 PM , Rating: 2
If you go buy a Toyota Camry, it loses value as soon as you drive off the lot because any one that might be interested in buying your used one can easily go get a brand new one from the dealership. That is the bargaining chip you were referring to, the buyer can say lower the price or I'll go get mine from a dealership.

The Volt has extremely limited numbers and that means that when someone drives the car off the lot it might well have been the only one that was sent there. Someone else can't go to the dealership and get one, because there are no more. However you can go on ebay and find someone who purchased 3 of them from local dealerships and is now selling them for 60k each. So 60k becomes the cost of entry.

Same thing happened with the Prius a while back. Supply ran out and there was still demand so some dealerships jacked up the prices and some owners were reselling for more than they paid for them.


RE: Supply and Demand
By Spuke on 8/14/2010 12:53:50 AM , Rating: 2
quote:
Someone else can't go to the dealership and get one, because there are no more.
Thank you.


RE: Supply and Demand
By tdawg on 8/14/2010 2:59:05 PM , Rating: 2
Yes, but at a some point, price decreases demand, regardless of supply. I'm guessing a $20k premium for a used version will do plenty to decrease demand. The initial run of vehicles may be limited, but if they sell from the dealers quickly, GM will likely ramp up production.


RE: Supply and Demand
By johned3 on 8/14/2010 8:14:11 AM , Rating: 1
I remember the same thing happened when Chrysler released the Plymouth Prowler. Each of the dealerships in my town got one car and they simply auctioned it off to the highest bidder. With the limited availability of the Volt there may be places where this happens, too. The original MSRP on the Prowler was 35 to 40K and I know the one at the dealership closest to me went for just over 100K. The market will eventually determine the price whether it's the dealer or the the next person to own it.

One of the main makes a car lose it's value is driving it off the lot. If I bought a volt at a dealer that was forced to sell at MSRP and I'm likely to make 20K above that by selling it tomorrow, I think I'd spend $100 to rent a trailer from someplace and haul it away instead of drive it.


RE: Supply and Demand
By mindless1 on 8/14/2010 3:31:38 PM , Rating: 2
Asking $20K more and actually selling it for that are two different things... and taking it off the lot still makes it a used car whether it has addt'l miles or not.


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