FYI: A tax CREDIT of $2,100 is worth exactly $2,100 unless you don't owe that much in taxes, in which case you can't afford one of these cars, OR if you are subject to the Alernative Minimum Tax, in which case you need not sweat a couple thousand bucks. This would be true in nearly all cases.
To say a tax credit is only worth $525 is to be off in the math by $1575, or, maybe a year's worth of gasoline.
Be patient ,it's not on the IRS web site yet,but the law was signed in august by our venerated pres. As of january 06 you will be able to save $2100 from the civic hybrid purchase right off what you owe to the feds at tax time,and if you don't owe this much ,you will get a refund on the income taxes that you have paid thru the year,and if you don't have an income you will get a credit for the next time you owe taxes,capice? In Connecticut the sale taxe on the Civic Hybrid is eliminated,saving me over $1200,so btw the two incentives($1200+$2100) it saves me at least $3200. In my case buying the hybrid made more sense.
I am definitely not an expert on the new tax credit.. That said, here is how I read it..
Once a manufacturer reaches the limit, all cars sold in that quarter of the year and the next quarter qualify for the credit..
In other words, it isn't a hard cap.. the cap just triggers the end date. So, the dealers should know at least 90 days before the expiration of the credit for their particular make.
Since I won't file taxes for 2006 until next January, the tax credit could have reached its limit for a couple of quarters. I'm curious how the IRS will sort out who gets the credit and who doesn't.
Those are good questions. The dealer should have some kind of form to fill out. But until the IRS rules they may not be available.
Another question. Does the 60k units mean, 60k sold or 60k sold to people that qualify. I imagine at least half the hybrids will be sold to companies and people that do not qualify for the credit. Many people will not know if they qualify until they do their taxes in 2007. Remember the AMT may get a lot of us this year.
I'm thinking Katrina and the war will drain our funds and you will get a big "So Sorry" we are out of money.
It is like any other credit or deduction.. If you qualify for it, you claim it.. As stated above, you will know if you qualify at the time of purchase.
If the IRS asks you to prove you qualify, then you'll have to back it up with paperwork..
My guess is the IRS will keep track of the unit sold by keeping tab on the Vehicle Identification Number(VIN)so you probably will have to file the numbers on your taxe form. What else could they do to count how many units are sold? There will be a place to file the reduction on the taxe form.
Again.. this might all be rampant speculation.. or "educated guessing" on my part... but, I think it will work this way..
Toyota reports to the IRS that they've sold 60K Priuses by June 15th.. By the rules, that means that every Prius sold by September 30th (the end of the next quarter) will qualify for the tax credit... Toyota tells their dealers that the credit is only for cars sold by 9/30, and the dealers inform their customers..
You take the credit if you qualify... If the IRS requires proof (whether on the form, or by letter or audit), then you provide the paperwork.
There are hundreds of different credits administered under the tax code... This one shouldn't be any more difficult than any other..
I think that is the way it will go also. My question, is that a hard figure on the 60K? We know they will not all qualify for the tax credit. I guess the Feds make out if only 30k or the 60k owners qualify.
Why would they not qualify? If you owe money you get the $2100 break ,if you don't, you get the check in the mail. First 60000 HCH owners get it, the next one do not. Am I wrong? Did I miss something? :sick:
It is my understanding that the gov is only going to allow the first 60,000 units to qualify for the deduct. If tyhat is the case then I would try to have yours BEFORE end of summer.
...is supposed to be about the HONDA Civic Hybrid, it would be reasonable for me to point out at this point that it is highly unlikely that Honda will bump up against the tax credit ceiling in calendar year 2006. Only Toyota is going to sell enough hybrids under both the Toyota and Lexus brands to hit the ceiling in '06. If Honda hits the 60,000+ mark in 2006, as noted above, the "grace period" extends into the quarter FOLLOWING that event - just about impossible for Honda buyers to run out of credits in the coming year.
The 60,000 ceiling is for each manufacturer - no way you need to rush out an buy a Civic or Accord hybrid for fear that Honda will sell more than this in the first three quarters of this year.
That's fine this board is about the HCH. Let's assume this is 2007, wouldn't potential buyers want to know HOW to verify if they qualify for the credit? I don't think I would want to trust dealers to tell me. There must be another way.
Alternate Minimum Tax for one reason. My tax man said I may get hit this year for the first time. You do NOT get the hybrid tax credit if you are stuck in this AMT bracket. AMT hits the demographic that buy hybrids.
Although most folks have never heard of the alternative minimum tax, by the time they do, it will be too late. By 2010, nearly 30 percent of all taxpayers making between $75,000 and $100,000 a year (about 1.7 million people) will be subject to the AMT if it is not changed, according to a Treasury Department study released last year.
Created in 1969, AMT was designed to prevent the very wealthy from dodging taxes through shelters and deductions. Taxpayers are required to calculate both their regular tax and what they would owe under the alternative system - then pay Uncle Sam the higher of the two figures. In effect, taxpayers are simply adding back some tax deductions and income exclusions to regular taxable income to arrive at the alternative minimum taxable income. However, because the AMT was never indexed to inflation, an increasing number of regular middle- and upper-middle-income folks find themselves owing the convoluted tax.
As many have pointed out the manufacturer gets downgraded after 60k units are sold. The tax credit for the following quarter will be reduced. It will only affect Toyota for the next couple years. I think you are safe for all of 2006 on the HCH.
Less than or equal to 8,500 pounds: 1. Fuel economy credit of $400 to $2,400, depending upon the city fuel economy compared to the 2002 standard; and 2. Conservation credit of $250 to $1,000 – based on estimated lifetime fuel savings compared to vehicle meeting 2002 model year standard.
You figure it out. It is anyone's guess. Somewhere between $650 & $3400. How the city figures in is beyond me.
are you saying that they charge $1000 premium to Pre-Order?
I am starting to hear dealerships going away from Pre-Ordering. We definately get backed up with Pre-Orders but our customers certainly do appreciate it.
Yeah, something like that. If you want to put your dibs on a particular car due in then they charge +$1000. "If it happens to make it to our lot and nobody has reserved it, then we sell it for MSRP."
that just doesn't make sense...I've been in this business too long to try to figure different dealerships out.
We have a couple out here (east coast) that do not reserve cars for customers. First come first served when the truck arrives...and AFTER they put equipment on them.
We figure that by reserving cars for people it makes for a better buying experience. Especially if you are waiting for a couple of months for delivery of your car, and you know that you have a car.
was contacted by Honda World in Downey, CA last month (January) with an MSRP quote for the Hybrid. unfortunately I couldn't make it to the dealership, but told them I'd wait for the next shipment. the phone quote I received yesterday was for $4K above MSRP.
Power Honda in Costa Mesa provided me with a $1K above MSRP quote by e-mail.
We just bought our 2006 hch yesterday. It is an awesome car and we felt after driving the civic LX sedan that the drive experience (beyond the green and gas mileage etc) was worth the $5,000 difference in price. We did not have to wait, but the dealer had a bunch of extra fees (protection package, "etching")--which bumped the cost, but we did not have to wait. We ended up paying around $24,000 OTD- minus warranty...how does this compare to others? It is a little misleading because for the actual car, we payed MSRP ($22,400) minus $750...but in the end we really paid a bit of a sucker tax...
PT Barnum said "There is a sucker born every moment" No car (except for exotic Sportscars) is worth more than MSRP...these extra fees you should have not paid for...these protection packages are pure added dealer markup...when you left the dealership the mgr. had a nice laugh for himself... I would have given him a bank check for the $22,400 ,he would have taken it in a second ! I can just imagine how much he charges for Honda OEM xtras. One dealer I know wants $550. for the foglamps installed....He is making at least $300 on one option. :mad:
Wow! Thanks for the really constructive feedback Mr. TheKing...now I REALLY know how to negotiate for a new car! Someone should really pay you for all your expertise- I mean, I can't believe I got that response without paying anything- Your username says it all.
For other possible responders: I know that tax varies state to state, so comparing OTD (i.e. after tax, title, license etc) is tricky, but I would appreciate an informative response. Thanks again.
I imagine that pricing is different in different parts of the country. While some areas are selling above MSRP, there are some that are selling below MSRP. Since you have already purchased yours, it is somewhat of a moot point to see if you got a good deal or not. When gas goes over $3.00 per gallon this year, you'll know whether you got a good deal.
You are right. I just was a little suprised by the add ons such as "protection package" and "etching" which were extra charges after we negotiated the price. I was wondering if these were standard tactics. With these add-ons, we were still approx $500 below MSRP but I was wondering what others experiences were and how to deal with this in the future. Thanks.
" I just was a little suprised by the add ons such as "protection package" and "etching" which were extra charges after we negotiated the price"
I know what you are saying. We do dealer exchanges with many dealerships in our area. Some of their "add-ons" are posted on the window in whats called a "bump sticker" The prices charged are stupid...totally stupid.
I couldn't imagine working in a dealership and having to justify an ADM of anything, much less $2000 or more to a customer.
Thanks for your response. I was actually also wondering about the legality of placing a term like "protection package" on the invoice, without actually listing the components of this "protection package." I thought it was federal law that anything added onto the car had to be itemized. In addition, the "protection package" was not on the sticker of the car...The dealer says that the protection package (which as far as I can tell is mud flaps and a few other things that I don't know because it was never itemized) is put on "every car" as they are unloaded from the truck. Is this on the up and up? Thanks.
"I was actually also wondering about the legality of placing a term like "protection package" on the invoice, without actually listing the components of this "protection package."
The term isn't added to the invoice. The invoice is what it is and is not altered. In other words with Honda the invoice for a Civic Hybrid is the same in Maryland as it is in Texas or Washington.
They have aded a small sticker to the side of the Monroney Label "window sticker" with the term "protection package"
Is it legal? Yes it is.
Is it right? I believe it could be within reason. Our approach is to put splash guards on all cars that have not been "reserved" on the inbound trip. With cars that have alloy wheels we put a set of wheel locks as well.
Some dealers will put much more in the way of "soft adds" such as "paint protection", "ding protection" etc. Those are not hard adds and should be left to the consumer.
We supply cars for the local Car Show and Honda mandates that we load them up with accessories to display...in turn we get them after the show for sale. I have Hybrid w/Nav that has more than the usual equiptment on it in stock. In some ways that's good for us as we can use this as a test drive car before someone buys it.
Actually, I guess my point is that there was no extra side sticker on the car indicating what the added "protection package" was. In other words, nowhere on our paperwork were "mudguards" actually mentioned. I know that the side-sticker is legally necessary in some states...I guess not here in texas. Thanks.
I just picked up my HCH at MSRP with NO options and no hassles and friendly, caring service, with polite sales people at Barber Honda in Bakersfield. It was a 97 mile drive from North Hollywood, but VERY worth it. They said the wait would be 30 to 60 days. My wait was about 5 weeks.
I looked all over LA, Orange, San Bernardino, Ventura counties and was met with a disgusting gaggle of moronic Honda dealership people who really didn't care if I lived or died. I thought I found an MSRP deal at Penske Honda in Ontario, but I also sent Barber a $100 deposit. My local dealership, where I bought my last Honda, didn't really care to talk to me unless I wanted to pay $2000 over MSRP.
On Friday morning I got a call from Penske Honda to tell me that they had just had a sales meeting and had decided to take deposits instead of demanding that people on the waiting list arrive at the dealership within 2 hours of the call that they had a car for them (they did not tell me about this requirement). They also told me that that they had changed the mandatory "options" that would be added. They said they had previously told me about the mandatory "options", not true. The new mandatory options were mud flaps, wheel locks, fog lights, and LoJack. I said, "You told me I could buy the car for MSRP!" They said, "Yeah, MSRP PLUS!" I told them to cross me off the list, they really didn't care. Honda dealerships used to have ethics.
I was really feeling grumpy. After buying 9 new Hondas, I really thought I deserved better.
Friday afternoon, the really nice guy from Barber called to tell me, "Your HCH is here. When would it be convenient for you to pick it up?" I was in defensive mode and asked, "Is it white with Nav?" He said, "Yes." I said, "And it's MSRP without ANY options? He said, "Yes." I said, "I'll be there at 1PM tomorrow."
Everything went perfectly and according to plan. The dealership was delightful and very comfortable. Everyone was very friendly. I HIGHLY recommend getting out of So Cal (north of the Grapevine) and I highly recommend Barber Honda in Bakersfield. They will get ALL of my business, forever.
Picked up my Galaxy Gray 3/31. Paid $20,677 + tax and tags. Negotiated all season mats in exchange for closing on the 31st rather than 4/1. I used the United Buying Service through my credit union. I feel really well about my deal and the buying experience.
I was at Goodson West Honda in Houston picking up my new Pilot a couple of days ago, beginning to salve my SUV guilt (we really did need an AWD truck) by asking to have my name put on the waiting list for a civic hybrid. He was telling me that it would be about a 3 month wait for nav and that I wouldn't need to put down a deposit (as I'd just bought a 30K car from them) when another salesman walked up and said a deal had just fallen through and they had one that I could actually test drive. Turned out it was exact color etc. that I would have ordered given the opportunity. I bought it the next day for straight MSRP $23,900 (the pre 3/15 price since it had been ordered months ago) with no addons. Don't know if this experience can be extrapolated, but I would recommend the dealership based on both buying experiences. Use the internet guys and you get fleet pricing-they don't charge for or require addons. They actually had already installed LoJack and some form of "sealant" and took a loss.
Congratulations. I too had a similar experience with Honda Dealers in Los Angeles County. I even drove out to Santa Ana Honda after the dealer assured me over the phone I would be able to purchase an incoming Hybrid for MSRP to only find out that it was a gimmick to get me to the negotiating table. While I talked Santa Ana down to $500 above MSRP, I told them I wasn't interested in doing business with them. I was lucky enough to find a Hybrid in San Diego County at MSRP.
If you live in LA, I would recommend that you call around to the dealerships as far north as Santa Marina and as far south as San Diego. The scenic drive is well worth the trip. Good luck.
I had a really negative experience with Penske Honda in Ontario, CA, internet dept. They took my deposit, and promised me a car that was on order. When time came, the car was never ordered and they tried to switch me to another car. They were very dishonest.
HI, We bought a HCH back in '03 and at the time, we were exempt from paying the Maryland Sales Tax. Is that not the case anymore?? We are looking to upgrade to the 2006 model. Thanks.
Comments
To say a tax credit is only worth $525 is to be off in the math by $1575, or, maybe a year's worth of gasoline.
In Connecticut the sale taxe on the Civic Hybrid is eliminated,saving me over $1200,so btw the two incentives($1200+$2100) it saves me at least $3200. In my case buying the hybrid made more sense.
regards,
kyfdx
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Once a manufacturer reaches the limit, all cars sold in that quarter of the year and the next quarter qualify for the credit..
In other words, it isn't a hard cap.. the cap just triggers the end date. So, the dealers should know at least 90 days before the expiration of the credit for their particular make.
regards,
kyfdx
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Another question. Does the 60k units mean, 60k sold or 60k sold to people that qualify. I imagine at least half the hybrids will be sold to companies and people that do not qualify for the credit. Many people will not know if they qualify until they do their taxes in 2007. Remember the AMT may get a lot of us this year.
I'm thinking Katrina and the war will drain our funds and you will get a big "So Sorry" we are out of money.
If the IRS asks you to prove you qualify, then you'll have to back it up with paperwork..
regards,
kyfdx
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Toyota reports to the IRS that they've sold 60K Priuses by June 15th.. By the rules, that means that every Prius sold by September 30th (the end of the next quarter) will qualify for the tax credit... Toyota tells their dealers that the credit is only for cars sold by 9/30, and the dealers inform their customers..
You take the credit if you qualify... If the IRS requires proof (whether on the form, or by letter or audit), then you provide the paperwork.
There are hundreds of different credits administered under the tax code... This one shouldn't be any more difficult than any other..
regards,
kyfdx
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First 60000 HCH owners get it, the next one do not. Am I wrong? Did I miss something? :sick:
The 60,000 ceiling is for each manufacturer - no way you need to rush out an buy a Civic or Accord hybrid for fear that Honda will sell more than this in the first three quarters of this year.
Alternate Minimum Tax for one reason. My tax man said I may get hit this year for the first time. You do NOT get the hybrid tax credit if you are stuck in this AMT bracket. AMT hits the demographic that buy hybrids.
Although most folks have never heard of the alternative minimum tax, by the time they do, it will be too late. By 2010, nearly 30 percent of all taxpayers making between $75,000 and $100,000 a year (about 1.7 million people) will be subject to the AMT if it is not changed, according to a Treasury Department study released last year.
Created in 1969, AMT was designed to prevent the very wealthy from dodging taxes through shelters and deductions. Taxpayers are required to calculate both their regular tax and what they would owe under the alternative system - then pay Uncle Sam the higher of the two figures. In effect, taxpayers are simply adding back some tax deductions and income exclusions to regular taxable income to arrive at the alternative minimum taxable income. However, because the AMT was never indexed to inflation, an increasing number of regular middle- and upper-middle-income folks find themselves owing the convoluted tax.
For Hybrids
Less than or equal to 8,500
pounds:
1. Fuel economy credit of
$400 to $2,400,
depending upon the city
fuel economy compared
to the 2002 standard;
and
2. Conservation credit of
$250 to $1,000 – based
on estimated lifetime fuel
savings compared to
vehicle meeting 2002
model year standard.
You figure it out. It is anyone's guess. Somewhere between $650 & $3400. How the city figures in is beyond me.
Robertson Honda, North Hollywood, CA; MSRP +$1000 to order
...but if they receive one and it's not pre-ordered they sell for straight MSRP.
Honda of Hollywood, Hollywood, CA; MSRP +$2000
I am starting to hear dealerships going away from Pre-Ordering. We definately get backed up with Pre-Orders but our customers certainly do appreciate it.
We have a couple out here (east coast) that do not reserve cars for customers. First come first served when the truck arrives...and AFTER they put equipment on them.
We figure that by reserving cars for people it makes for a better buying experience. Especially if you are waiting for a couple of months for delivery of your car, and you know that you have a car.
Power Honda in Costa Mesa provided me with a $1K above MSRP quote by e-mail.
For other possible responders: I know that tax varies state to state, so comparing OTD (i.e. after tax, title, license etc) is tricky, but I would appreciate an informative response. Thanks again.
Here on the east coast prices are below MSRP.
I know what you are saying. We do dealer exchanges with many dealerships in our area. Some of their "add-ons" are posted on the window in whats called a "bump sticker" The prices charged are stupid...totally stupid.
I couldn't imagine working in a dealership and having to justify an ADM of anything, much less $2000 or more to a customer.
The term isn't added to the invoice. The invoice is what it is and is not altered. In other words with Honda the invoice for a Civic Hybrid is the same in Maryland as it is in Texas or Washington.
They have aded a small sticker to the side of the Monroney Label "window sticker" with the term "protection package"
Is it legal? Yes it is.
Is it right? I believe it could be within reason. Our approach is to put splash guards on all cars that have not been "reserved" on the inbound trip. With cars that have alloy wheels we put a set of wheel locks as well.
Some dealers will put much more in the way of "soft adds" such as "paint protection", "ding protection" etc. Those are not hard adds and should be left to the consumer.
We supply cars for the local Car Show and Honda mandates that we load them up with accessories to display...in turn we get them after the show for sale. I have Hybrid w/Nav that has more than the usual equiptment on it in stock. In some ways that's good for us as we can use this as a test drive car before someone buys it.
FYI
I looked all over LA, Orange, San Bernardino, Ventura counties and was met with a disgusting gaggle of moronic Honda dealership people who really didn't care if I lived or died. I thought I found an MSRP deal at Penske Honda in Ontario, but I also sent Barber a $100 deposit. My local dealership, where I bought my last Honda, didn't really care to talk to me unless I wanted to pay $2000 over MSRP.
On Friday morning I got a call from Penske Honda to tell me that they had just had a sales meeting and had decided to take deposits instead of demanding that people on the waiting list arrive at the dealership within 2 hours of the call that they had a car for them (they did not tell me about this requirement). They also told me that that they had changed the mandatory "options" that would be added. They said they had previously told me about the mandatory "options", not true. The new mandatory options were mud flaps, wheel locks, fog lights, and LoJack. I said, "You told me I could buy the car for MSRP!" They said, "Yeah, MSRP PLUS!" I told them to cross me off the list, they really didn't care. Honda dealerships used to have ethics.
I was really feeling grumpy. After buying 9 new Hondas, I really thought I deserved better.
Friday afternoon, the really nice guy from Barber called to tell me, "Your HCH is here. When would it be convenient for you to pick it up?" I was in defensive mode and asked, "Is it white with Nav?" He said, "Yes." I said, "And it's MSRP without ANY options? He said, "Yes." I said, "I'll be there at 1PM tomorrow."
Everything went perfectly and according to plan. The dealership was delightful and very comfortable. Everyone was very friendly. I HIGHLY recommend getting out of So Cal (north of the Grapevine) and I highly recommend Barber Honda in Bakersfield. They will get ALL of my business, forever.
If you live in LA, I would recommend that you call around to the dealerships as far north as Santa Marina and as far south as San Diego. The scenic drive is well worth the trip. Good luck.