A $7,500 electric-car tax credit scares dealers

For quite some time, there have been incentives offered to those consumers who purchase hybrids and EVs by way of tax credits. While all is well and good with that premise, consumers have to wait until tax time to realize their savings. A new proposal out of the White House, aimed at putting 1 million EVs on the road by 2015, will put that money directly in the pockets of consumers at the time of purchase.

Under the proposed program, dealerships would offer on the spot discounts, and claim the tax credit for themselves at the end of the year. While all of the details have not yet been worked out, some dealers are concerned that there can be problems recouping cash, as was the case with cash-for-clunkers.

Analysts are saying however, that dealers need not worry. For starters, the credit situation would be much simpler, as the credits are based on the product, and have nothing to do with income or wealth of the individual. The amount of credits processed will also be minimal compared to the number of cars processed through cash-for-clunkers. J.D. Power & Associates estimates EV sales of 20,000 units this year, which is minimal compared to overall volume.

NADA will determine whether the proposal makes sense for dealers as well as consumers once more info is made available.

– By: Stephen Calogera

Source: CNNMoney