Motivated by a green bent and a desire to buy American, Richard Kaufman visited a Los Angeles area Chevrolet dealership last month intent on buying a Volt. He left steamed--bolting straight for a nearby Nissan store to sign up for a Leaf.
Kaufman says a salesperson at the Chevy store quoted him a price $5,000 above the base Volt's sticker of $41,000, including delivery.
"It's morally wrong, and it's not good business," fumed Kaufman, 53, an entertainment industry executive. "GM not only lost me on this Volt, they lost me for a lifetime."
Hefty dealer markups on buzz-worthy cars are nothing new. Models such as the 2008 Dodge Challenger SRT8 muscle car and the 2000 Chrysler PT Cruiser have commanded prices above sticker at launch.
But as Kaufman's experience shows, the practice risks alienating customers and hurting the reputation of dealers and brands. Markups on green vehicles such as the Volt plug-in hybrid can especially raise the hackles of buyers and green advocates because the federal government offers a $7,500 subsidy to reduce the car's price.
Some Volt markups by dealers recently popped up on eBay. This month Tennyson Chevrolet in suburban Detroit listed a Volt with a premium trim package for $46,923, or $2,000 above sticker, according to the listing.
The ad said: "The hardest car to get in the country!" Messages left for the store's general manager weren't returned.
General Motors spokesman Rob Peterson says GM discourages gouging and has helped Volt buyers frustrated by dealer markups find a better price. He said most dealers seem to view the Volt as a halo car and aren't going above sticker.
"Most dealers seem to be looking at how to leverage the Volt to bring more people into their dealerships," he said.
Rick Alpern, general manager at Keyes Chevrolet in Van Nuys, Calif., the store Kaufman says tried to gouge him, said only: "The majority of the Volts we have sold have sold at MSRP."
The Volt, which was launched in November, is being distributed to dealers in California, Michigan, Texas, New York, New Jersey, Connecticut, and Washington, D.C. It should be available nationwide by year end.
Nissan North America hasn't seen gouging on the Leaf electric sedan, and some dealers are discounting it, said Brian Maragno, Nissan's program manager for electric vehicle sales operation and network strategy. He credits the Leaf's Internet launch last year, during which Nissan took $99 refundable deposits on 20,000 Leaf reservations.
Now that it's available, only people who had put down deposits can convert their reservations into purchases. Buyers are free to shop retailers online for competing offers on the car, a move Maragno says encourages competitive pricing.
(Source: Automotive News)