Photo of a Chevy Volt.
The Chevy Volt: too expensive or worth the money? CC by holy7th/Flickr

Fans of green vehicles are waiting on General Motors. GM is releasing the Chevrolet Volt, or Chevy Volt, pretty soon. The car is a plug-in hybrid, thought to deliver fuel efficiency far above the Toyota Prius and the Honda Insight. There’s some rotten news about it, though. Dealers might charge more than they should for it. A dealership told Edmunds that would be charging far above recommended retail.This isn’t the first car that would be expensive at first and then have its price dropped later to meet demand.

How did Edmunds learn about this?

According to the Christian Science Monitor, General Motors has quoted the price of the Volt previously at about $40,000. The initial release is likely to be limited to about 10,000, as General Motors has the capacity to manufacture only 30,000 of the cars per year, which it plans to expand to 45,000 by 2012. The comments in question were over what the dealership planned to sell the Volt for once it received a few. The dealer is unknown, as Edmunds wouldn’t say who it was. The dealership said it would charge $20,000 more than the Manufacturers’ Suggested Retail Price, or MSRP.

Customer backlash

The news broke. Then it spread quickly. GM can’t tell dealerships what to charge. All it can do is suggest that dealers stick close to MSRP. A Florida dealer network, Auto Nation, has told the staff that anyone who price gouges will be fired. Consumers don’t like it when they are forced to pay more than they should.

This is how demand is stoked

It’s a common practice when to release hotly awaited item — like the latest smarphone — in limited supply, at a high cost, so that demand builds, and once the price comes down, the people waiting to buy can afford to. The Volt will likely be in high demand. It can go 40 miles without using gasoline.

More information on this topic

CS Monitor: http://csmonitor.com/Business/2010/0817/Chevy-Volt-price-gouging-Report-of-dealer-s-20-000-in-extra-charges

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