Howdy, Stranger!

It looks like you're new here. If you want to get involved, click one of these buttons!

Toyota Prius



  • 2004 Toyota Prius Certified for Clean-Burning Fuel Deduction

    IR-2003-114, Oct. 6, 2003

    WASHINGTON — The Internal Revenue Service has certified the 2004 Toyota Prius as being eligible for the clean-burning fuel deduction. The certification means taxpayers who purchase a new hybrid vehicle may claim a tax deduction of up to $2,000 on Form 1040.

    Federal tax law allows individuals to claim a deduction for the incremental cost of buying a motor vehicle that is propelled by a clean-burning fuel. By combining an electric motor with a gasoline-powered engine, these hybrid vehicles obtain greater fuel efficiency and produce fewer emissions than similar vehicles powered solely by conventional gasoline-powered engines.

    Under current law, the clean-burning fuel deduction will be reduced incrementally until it expires beginning 2007. Purchasers of IRS-certified cars will be able to claim a deduction of $2,000 if the vehicle is placed in service on or before Dec. 31, 2003. The $2,000 maximum deduction will be reduced by 25 percent for vehicles placed into service in 2004, by 50 percent in 2005 and by 75 percent in 2006. No deduction will be allowed for vehicles placed in service after Dec. 31, 2006.

    Under the law, the one-time deduction must be taken in the year the vehicle was originally used. The taxpayer must be the original owner. Individuals take this benefit as an adjustment to income on their Form 1040. They do not have to itemize deductions on their tax returns to claim it. To claim the deduction, write “clean fuel” on Line 33 of the 2003 Form 1040. Also, see the Instructions for Form 1040.

    The amount of the deduction for the Prius was set after the manufacturer, Toyota Motor Sales, U.S.A., Inc., documented for the IRS the incremental cost related to the vehicle’s electric motor and related equipment.

    The IRS previously certified the Toyota Prius for model years 2001, 2002 and 2003. The IRS also previously certified the Honda Insight for model years 2000, 2001 and 2002 and the Honda Civic Hybrid for model year 2003.

    Related Item: Previous certification announcements.

    Subscribe to IRS Newswire
  • Some states do have a tax credit for hybrid vehicles.
  • john1701ajohn1701a Posts: 1,897
    > have you bumped up the tire pressures

    I'm running 42/40 now.

    I did that with fantastic results for the first 18,000 miles on the Goodyears on my 2001 (very similar to what the 2004 comes with). Then I bumped them to 44/42. That made it so you could feel every detail in the road. I liked it that way. The increased awareness is rather helpful when driving on snow & ice.

  • john1701ajohn1701a Posts: 1,897
    > John, is your driving predominantly city or highway,
    > or what mix of the two?

    It's a mix.

    My commute favors suburb type driving (up 55 MPH). And on the weekends I open it up on the highways (up to 70 MPH).

    Lifetime calculated value for my 2001 Prius after 59,827 miles was 45.4 MPG, with winter lows near 40 and summer highs at 50.

  • xcelxcel Posts: 1,025
    Hi Backy:

    ___The 04 Prius arrives w/ ABS as std. but not traction control. You must purchase Package # 7 or 9 for that. As far as the production line is concerned, then why has everything linked here talk about the production line instead of the where the HSD engines are made? As for the Fox Mulder stuff, you are whacky.

    ___Good Luck

    ___Wayne R. Gerdes
  • john1701ajohn1701a Posts: 1,897
    > arrives w/ABS as std. but not traction control
    > You must purchase Package # 7 or 9 for that.

    You are thinking of the VSC (Vehicle Stability Control) package option.

    Traction-Control is standard.

  • Wow! You are absolutely correct fndlyfmrflyr! What I thought was a tax credit is indeed a tax deduction which translates to a return of about $675 instead of $2000. My error resulted from a failure to check up on the dealers who consistently stated it was indeed a tax credit. The fault is mine and I should have known better.

    Since I now see that my Prius is going to cost about $1300 more than I previously thought, I must revise my previous statements. I no longer believe the Prius is worth the money.

    For those who have read my previous messages, I am putting my money where my mouth is and will get my deposit back today (yes, it’s fully refundable and specifically written into the contract). Some lucky person on the waiting list will get my car when it arrives in the next couple weeks.

    Obviously I’m disappointed the $2000 is a deduction and not a credit. Regardless, thank you so much for the correction. This just goes to prove how helpful these message boards truly are!
  • markjennmarkjenn Posts: 1,142
    Dave, you still don't get the point. I'm not arguing what's a fair profit - I'm arguing that it doesn't matter. It's like arguing whether the price of milk is fair or not. A free market prices things by supply/demand - the value judgment of a fair profit has no bearing. It doesn't influence how much you pay nor does it influence how much you should pay.

    I see people constantly using the term "gouging" to describe dealers charging over MSRP. But I never see them willing to describe themselves as gougers by offering less than MSRP. Why is this a one-way street?

    In your particular case, I see you are backing out. if you deem the car is not worth the money, you've made a good decision. But if you are backing out of your car deal because you think the dealer is making too much profit, then you're losing out on a car that may be a great value to you, regardless of what the profit margin the dealer is making.

    Put another way, let's say you're looking at two cars and the market price of A is $1000 over MSRP and B is $1000 under MSRP. And let's say these market prices work out exactly the same. If you still like A better than B, then you should select A, regardless of the fact that the dealer for A is making an exorbitant $2K more. (This situation happens all the time with Honda dealers who generally have much higher profit margins than, say, Chevy dealers. Should we not buy Hondas because dealers make more?)

    What the dealer makes is immaterial! It is valuable data for negotiations to get the best price, but in the final analysis, the market sets the price, not the dealer or the customer. We should always focus on the price - not the discount!

    I never intended to insult you throughout this discussion and I don't understand why you are taking it that way. Regardless, I apologize.

    Yep, a can of worms. I'll bow out and let John pitch the car.

    - Mark
  • wwestwwest Posts: 10,706
    Only with an unlimited supply....

    Artificially limiting the supply skews the market price.
  • I don't know how accurate this is but I've been having extended discussion with a St. Louis dealer that I've had excellent service/pricing from when purchasing other manufacturer's cars, they carry several lines at multiple dealerships in St. Louis.

    He said Toyota was strictly controlling pricing on the Prius. They state that it costs them $25,000 to manufacture every Prius before options so they're actually taking a slight loss on each vehicle. The intention, he stated, was to build the market for a technology they're committed to and increase demand for the other 5 lines that are going hybrid over the next five years (Highlander, Tundra, Corolla, Camry, etc.). Sorry I don't remember the other models or sequence exactly.
  • daysailerdaysailer Posts: 711
    But are you suggesting that Prius production is "artificially" limited? And just what is meant by artificial? In as much as Toyota and Honda had to subsidize the price of the hybrids to bring them to market in the first place, it was the PRICE that was "artificially" limited. Even if they have now exceeded the break even price/cost, they surely won't produce more than they expect to sell at that price, even if they can. Automakers are not charitable organizations, nor should they be. There's nothing "artificial" about that.
  • wwestwwest Posts: 10,706
    How are we to know what the price would be if there WAS an unlimited supply? For instance, I didn't even attempt to buy one until the 03 came into over-supply....

    I have a habit of walking away when I see that dealer "local market price adjustment" of $5000.
  • beach15beach15 Posts: 1,305
    ...this morning I was parking my Cadillac in the school parking lot, and when I looked up, a relatively dirty maroon colored 2004 Prius was pulling in. This is the new model, mind you, and it was a student here at school. I'm not sure where or when they bought it, but it really looked kind of cool, especially the beige interior.

    Kind of weird that I've already seen this car, considering we leave in the second smallest state, Delaware. There isn't even any dealer close to here, except for about 45 minutes away. Should these cars already be out?
  • daysailerdaysailer Posts: 711
    unless Toyota screws up big-time. Manufacturers do not intentionally produce more than they can sell at a profit.

    If dealers can sell with a "local market adjustment" of $5K, either the product is a heck of a bargain @MSRP, or there are a lot of locals with more money than sense.
  • wwestwwest Posts: 10,706
    Personally, I'd much rather sell 50,000 units at 10% than 30,000 units at 13% margin.
  • xcelxcel Posts: 1,025
    Hi John1701a:

    ___Thanks for the pointer. I stand corrected.

    ___Dave_0471, I don’t know if this will help you but someone posted into a thread over at priusonline that Pa. residents receive 20% of the retail cost of a Hybrid automobile as a CREDIT on that states income tax. I believe Colorado as already mentioned offers a similar deal although maybe not that good. In any case, an 04 Prius for ~ $16,500 - $17,000 w/ rear wiper and side airbags would be a steal! That is if you live in Pa. or Co. I don’t know how factual the above is but you may just want to look into it in case the state you reside in has something similar. I wish Illinois did ;)

    ___Wwest, for the sake of our country, I would rather see Toyota sell 250,000 or more Hybrid’s at 2% profit ...

    ___Good Luck

    ___Wayne R. Gerdes
  • last I heard, PA had a GRANT program, not a credit.
    you had to file the paperwork BEFORE you took delivery,
    and had to provide MPG info to the state, to get your
    grant. depending on the application program run,
    it was as much as $2000 (IIRC), but to qualify
    depended if the program was funded for that particular
    run. (some areas of TX do the same, but have yet
    to receive funding...)

    CO does a state tax credit on income taxes.
    ME, MD, and NY don't collect (or as much of) the
    state sales tax.
    I'm not sure which form of tax credit OR does.
    I still haven't figured out if the Prius qualifies for
    the credit in RI.

    Many states will allow you to take the federal
    deduction on your state taxes. There's a line item
    for this in the MA state income taxes. some other
    states just use the amount off of the federal form.
    some states don't have a place for you to take the
    deduction at all.

    then, if you live in VA and get the special fuels
    license plate, you can drive solo in the HOV lanes
    in that state. (only state to allow it (because
    of federal highway funding reasons) but soon it'll
    be phased out unless legislation passes...)
  • backybacky Twin CitiesPosts: 18,624
    He said Toyota was strictly controlling pricing on the Prius.

    He probably meant, "This dealership is strictly controlling pricing on the Prius." If you will check the Legal Disclaimer on the price of the '04 Prius at, it starts off with "2004 Manufacturer's Suggested Retail Price, including the Delivery, Processing and Handling Fee." Later on, it says, "Actual dealer price may vary." And in fact, it does. The Toyota dealer I talked to about ordering a Prius offered me a $500 discount off MSRP. If Toyota were strictly controlling pricing on the Prius, how could the dealer get away with that?

    They state that it costs them $25,000 to manufacture every Prius before options so they're actually taking a slight loss on each vehicle.

    I'd ask the salesperson who "they" are. Toyota was making a profit on the '03 Prius. If it costs them $25,000 to make each car, before options, they would actually be taking a huge loss on each car ($19,995 before fees, plus figure in some dealer profit ( says invoice is $18,411 with no options). That's a loss of $6500 per car! I can understand that Toyota has not yet recouped their investment in the development of the new Prius, but to say they are losing $6500 per car is ridiculous. You could say something similar about every new car model or redesign early on in the product cycle, until the manufacturer has recouped their investment. The main thing is, what will be Toyota's profit or loss at the end of the run for the 2nd-gen Prius?
  • wwestwwest Posts: 10,706
    Given the number of vehicles Toyota sells worldwide a loss of $6500 on each Prius might be a damn good investment.

    And then there is the manufacturer's fleet average fuel economy issue to consider also.
  • backybacky Twin CitiesPosts: 18,624
    Maybe, except Toyota already made that investment in the Gen One Prius, and by the end of its run they were turning a profit on each car. Given that, why would Toyota design a Gen Two car that they plan to sell in much higher numbers than the Gen One model and take a $6500 loss on each unit? It just isn't logical, or smart--and I respect Toyota as being a very smart company.

    Re fleet average... with the ECHO, Corolla, Camry, and RAV4 in their stable and selling in large quantities combined (esp. compared against the Prius' numbers), I don't see the fleet average argument.
Sign In or Register to comment.