GM Loaner Car and $7,500 Tax Credit

7584 Views 18 Replies 11 Participants Last post by Eevee, Oct 12, 2017

Eevee

Discussion Starter · Oct 7, 2017

Spoke with the dealer about this.

They are adamant that the GM Legal Team has assured them that they are able to sell the car as a previously titled demo/loaner and the purchaser of the demo is eligible for the tax credit.

The IRS code says:

'(d) New qualified plug-in electric drive motor vehicleFor purposes of this section—
(1) In generalThe term “new qualified plug-in electric drive motor vehicle” means a motor vehicle—
(A) the original use of which commences with the taxpayer,
(B) which is acquired for use or lease by the taxpayer and not for resale'

Those two lines seem to conflict with each other. The original use of the vehicle commenced with the dealer placing the car into the service loaner pool. However, the car was acquired for eventual resale because the dealer is selling the loaner car. The dealer has taken the position that 'original use' commenced when it was sold. And they have of course, 'never had issues'.

GM and/or the dealer has already titled the car. They are selling a 'used' title. Semantics aside, has anyone run into this actual situation in real life? The dealer can't produce anything other than 'we see no problems, call the IRS and everyone does this'.

Opinions - massive marketing snafu, or a legitimate gray area?

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firehawk72

· #9 · Oct 7, 2017

Eevee said:
Spoke with the dealer about this.

They are adamant that the GM Legal Team has assured them that they are able to sell the car as a previously titled demo/loaner and the purchaser of the demo is eligible for the tax credit.

The IRS code says:

'(d) New qualified plug-in electric drive motor vehicleFor purposes of this section—
(1) In generalThe term “new qualified plug-in electric drive motor vehicle” means a motor vehicle—
(A) the original use of which commences with the taxpayer,
(B) which is acquired for use or lease by the taxpayer and not for resale'

Those two lines seem to conflict with each other. The original use of the vehicle commenced with the dealer placing the car into the service loaner pool. However, the car was acquired for eventual resale because the dealer is selling the loaner car. The dealer has taken the position that 'original use' commenced when it was sold. And they have of course, 'never had issues'.

GM and/or the dealer has already titled the car. They are selling a 'used' title. Semantics aside, has anyone run into this actual situation in real life? The dealer can't produce anything other than 'we see no problems, call the IRS and everyone does this'.

Opinions - massive marketing snafu, or a legitimate gray area?

This is tricky so I will explain it this way. This car is for sure used, but it sounds like they have surrendered the title which is why there is "No MSO". Most likely this car has NEVER had the tax credit used and would still qualify; however, for peace of mind, UNLESS they produce an MSO, it simply isn't worth the risk! If you can get them to state in writing with the OWNER"S signature< "That if this car is rejected for the tax credit" they will pay you the difference...

If they are unwilling to do this, then well, keep looking

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firehawk72

· #16 · Oct 10, 2017

saltsman said:
This isn't difficult. They have the MSO or they don't. The only reason the MSO would be missing is if it was surrendered to title the car. Even if the dealer never claimed the rebate, a previously titled car is ineligible for the $7,500 rebate with the IRS. Period.

This is the one that I am totally unsure about. Yes, we all know what the IRS code says (as we have all read it and are still confused

, but it is rather vague in some degrees. My personal bet is that that line is there simply to simplify someone claiming the credit twice and that the IRS uses whether the tax credit has EVER been claimed per VIN, not title. So, I would imagine that some cars being sold this way would get the tax credit BUT most people are simply afraid to even try to claim it because the car is not listed as new.

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