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GM Loaner Car and $7,500 Tax Credit

7593 Views 18 Replies 11 Participants Last post by  Eevee
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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Was able to locate some additional information.

'For purposes of the 30D credit, a vehicle is not considered acquired prior to the time when title to the vehicle passes to the taxpayer under state law'

The dealer can't produce anything other than 'everyone does it'. Asked if it was worth the risk. Thet said the expected value of their exposure was $0. They refused to give a check for the credit and assert 'businesses can't claim the credit' which is just flat dumb.

Bob Johnson in Greece - here is a shout out to you!
Here is the latest piece found from Fuel which so far - is the only place that defines the 'original use' portion

*The following requirements must also be met for a certified vehicle to qualify:

The original use of the vehicle commences with the taxpayer—it must be a new vehicle.
The vehicle is acquired for use or lease by the taxpayer, and not for resale. (The credit is only available to the original purchaser of a new, qualifying vehicle. If a qualifying vehicle is leased to a consumer, the leasing company may claim the credit.)
Here they are moving the DRAC cars from the new section to the used section. Odd considering the liability was zero.
Here we go-

We have multiple cases open with Chevy. IRS won't discuss until 2017 tax year.

Chevy is still 'looking into it' which is surprising given it has been 7 years...they have zero on file. Strange after the legal team advised the dealer so heavily-_-

Chevy referred to a NYT article about dealers taking credits from early Volt launch that somehow refuted IRS code...I guess?

The sales manager denied the website changed despite screenshots. Chevy cited 'issues' a few months ago may be causing the problem.

Bob Johnson told me to get a lawyer and contact the IRS. They refused an unwind or a reimburse for the credit. 'Zero economic cost' to them.
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Article that Chevy is citing:

Don't fully comprehend how that helps their case.
Started reading some more on state incentives for NYS. The dealer demo seems to 'enter service' when the warranty starts. NYS is currently offering a rebate for electric cars for which demos may qualify for. The rebate program requires that the dealer must certify the car is new in regards to warranty provisions with a written statement to NYS.

Registered dealer loaner vehicles may be eligible for the program under the floor model, test
drive, rollback and unwind provision if the vehicle is coming out of loaner car service and offered
to an eligible consumer for purchase or lease. The original vehicle registration must be in the
dealership’s name. The vehicle must still be considered new by the vehicle manufacturer with
regards to warranty provisions or for the purposes of manufacturer rebates, etc. In addition to
the documentation required for all applications, the following documentation is required: copy of
the original MV-50 from when the dealer purchased the vehicle; copy of the original dealer
registration; copy of the original purchase agreement from the OEM to the dealer, and written
confirmation from the dealership certifying that a) the vehicle is a registered dealer loaner that is
being sold or leased to a consumer and b) the vehicle is still considered new by the vehicle
manufacturer for warranty provisions and for purposes of any existing manufacturer rebates.
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