Tax credits / incentives for hybrids?



  • catskillguycatskillguy Member Posts: 6
    I'd love to buy a hybrid, but you can't find them upstate NY. Dealers are sold out for 2005 model year. Do the car companies steer them to Cal/Sunbelt states?
  • zacharyazacharya Member Posts: 71
    Try and put an order in for 2006. This way you can get a tax credit. Where in the Catskills? I used to go there for the summer when I was a teenager. I can suggest a good dealer in PA if you want to travel.
  • catskillguycatskillguy Member Posts: 6
    About 5 miles off exit 21 of the Thruway, about 30 miles south of Albany. They call this area the Northern Catskills. Most people went to the southern Catskills like Grossingers, in Sullivan County.

    I try to stick to dealers in the Hudson Valley area. I don't care what they say, you get better service from the dealer you buy from. ... I can't say that I blame them. The Honda Dealer in Poughkeepsie already said they give a 20% discount for purchasers on service.
  • jmc0816jmc0816 Member Posts: 8
    Could someone with some degree of certainty clarify something for me. Is the 2005 tax break a DEDUCTION and the 2006 tax break a CREDIT? It seems that they are both only DEDUCTIONS but I have seen the 2006 been referred to as a CREDIT.
  • larsblarsb Member Posts: 8,204
    The 2006 stuff is a Credit, where the amount comes off your bottom line tax amount owed after all the calculations are finished. If you get a $3150 credit for purchasing a Prius, that means your overall taxable income drops by $3150. A much better deal for the taxpayer.

    The 2005 stuff is a just a deduction, meaning you only get to take a "percentage" of the amount off your taxes, based on your tax bracket.
  • gagricegagrice Pahrump, NevadaMember Posts: 31,450
    I must correct you on that. The tax credit is a direct deduction from your tax bill. If you are paying $10k in taxes for 2006 that will reduce your taxes by $3150. A $2000 deduction that is available through 2005 is taken from your taxable income. If you had a taxable income of $45,000 you would be able to reduce that to $43,000. Hope that makes it clearer.
  • larsblarsb Member Posts: 8,204
    Sorry Gary, I was correct.....The "deduction" is a percentage reduction, while the "credit" is a dollar for dollar tax reduction.

    see this page:

    "For most people, the credit, which reduces taxes dollar for dollar, will be more valuable than the existing $2,000 deduction, which reduces income before taxes.

    A $2,000 deduction reduces most people's tax bill by about $500 to $700.

    A $2,000 tax credit will cut most people's tax bill by $2,000, with a big exception.

    Unlike the deduction, the new tax credit will also apply to cars that are leased, although you will probably have to sign a five-year lease to get the full credit, says George Jones, managing editor in the Washington of CCH, which publishes tax information."
  • maldolizamaldoliza Member Posts: 3
    Hi, I'm new to this forum. I have been planning my Prius purchase for a few months now, saving up for a down payment. Now that I'm ready, this new tax law makes me think twice about buying in September as planned. It's hard to justify giving up a potential $3000 credit for the sheer joy of having my car sooner. It makes me wonder if at some point Toyota is going to have to give in and offer incentives to get rid of the rest of the 2005s. That would probably only happen if they finally reveal the details of the plan and it's required that you buy the 2006 car to qualify for the credit.
  • gagricegagrice Pahrump, NevadaMember Posts: 31,450
    Sorry Gary, I was correct.....The "deduction" is a percentage reduction, while the "credit" is a dollar for dollar tax reduction.

    Yes that is correct. What you said before is the credit is a deduction from your adjusted gross income. It is a deduction from the taxes you pay.
  • jmc0816jmc0816 Member Posts: 8
    Thanks guys, you are actually both correct but are wording your responses differently. The adjusted gross income piece that Gary is referring to is the same as saying it is a "percentage reduction" for 2005. You are only getting the effective tax rate portion of your $2000 deduction back as cash in your pocket. If your effective tax rate is 28% you would be getting $560 effectively back.
  • gagricegagrice Pahrump, NevadaMember Posts: 31,450
    welcome to the forum and glad you were able to figure out what we were both trying to explain. If you can wait till next year it would be worth it. Though I would think the supply of hybrids would be tighter.
  • jmc0816jmc0816 Member Posts: 8
    Thanks. I'm more than likely going to be ordering soon for Jan. 06 delivery. I'm waiting for my dealer to arrange a "meet and greet" with a vehicle so I can actually look at it. I'm not sure how big the hatch area is. (I'm concerned about my dog having enough room back there). From what I've heard the cars are also difficult to see out the rear so I'm also interested in the rear camera that the '06 models will have.
  • mi_satmi_sat Member Posts: 42
    To avoid confusion, and to be technically correct, one cannot ever say a "tax credit is a direct deduction." A credit and a deduction are two separately defined items on a tax return. They cannot both be used to define the same tax event.

    A credit is a REduction (dollar for dollar) to your taxes. A deduction reduces taxable income by the deducted amount. The net benefit of the deduction is your marginal tax rate times your deduction.

    In any event, here's an interesting website that lists what the expected 2006 tax credits will be by vehicle:
  • mi_satmi_sat Member Posts: 42
    Well, not exactly. It's your marginal tax rate, not your effective. Whatever.
  • catskillguycatskillguy Member Posts: 6
    Federal Tax Credits for Advanced Vehicles: On August 8, President Bush signed the comprehensive energy bill into law. Included were new tax credits for advanced vehicle technologies ranging from $250 to $3,400 depending on the vehicle's level of fuel economy improvement. For a limited time, quality hybrids like the Honda Civic Hybrid, Toyota Prius or Ford Escape Hybrid will qualify for tax credits in the range of $1,700-$3,150. The tax credits will be available beginning on January 1, 2006 and will be available through December 31, 2010, though they will expire earlier for the most popular hybrids. The full tax credits will be available until a manufacturer reaches 60,000 vehicles sold (60,000 for Toyota, 60,000 for Ford, etc.). Once a manufacturer has sold 60,000 vehicles, a one-year "phase out" will begin after the next complete calendar quarter; 50% of the credit will be available for that manufacturer's hybrids in the first two quarters of the phaseout period and 25% in the final two quarters. UCS estimates the following credits for each hybrid vehicle currently sold:
    HEV Model Emissions Rating Tax Credit
    2005 Toyota Prius Bin 3 $3,150
    2005 Honda Insight (automatic) Bin 5 $1,450
    2005 Honda Insight (manual) Bin 9 $0
    2005 Honda Civic Hybrid (automatic) Bin 2 $1,700
    2005 Honda Civic Hybrid (manual 5-speed) Bin 2 $1,700
    2005 Honda Civic Hybrid (lean burn, automatic) Bin 9 $0
    2005 Honda Civic Hybrid (lean burn, manual 5-speed) Bin 9 $0
    2006 Honda Civic Hybrid TBD* $2,100-$2,350*
    2005 Honda Accord Hybrid Bin 5 $650
    2005 Ford Escape Hybrid (front wheel drive) Bin 4 $2,600
    2005 Ford Escape Hybrid (four wheel drive) Bin 4 $1,950
    2006 Mercury Mariner Hybrid (four wheel drive) Bin 5 $1,950
    2006 Toyota Highlander Hybrid (front wheel drive) Bin 3 $1,950
    2006 Toyota Highlander Hybrid (four wheel drive) Bin 3 $2,200
    2006 Lexus RX-400h (four wheel drive) Bin 3 $2,200
  • mfusaromfusaro Member Posts: 6
    Hi all,

    I'm a new member, and am currently looking at the Honda Insight and the Toyota Prius.

    I was told by a local Toyota dealer that the tax incentive for a Prius purchased before the end of 2005 was $2000.00. He said that the 2006 incentive will only be $500.00. Judging by the previous posts, that doesn't appear to be the case. Was he misinformed?
  • blaneblane Member Posts: 2,017

    The person that you spoke with at your local Toyota dealer was WORSE than misinformed. He was just totally ignorant of the subject, or deliberately attempting to mislead you. Actually, he was probably trying to get you to commit NOW (which would be in his best interest), instead of waiting for delivery after January 1, 2006 (which, taxwise, would be in your best interest).
  • mfusaromfusaro Member Posts: 6

    I've done some homework and delved further back in this thread.

    I'm old enough to remember the gas crisis of the 70's. I recall sitting in long lines, waiting on odd or even days for my 'gas ration'. At the time I was driving a volkswagon beetle, so I was better off than some. I remember the devastating effect on the economy, the massive inflation, out of control interest rates, and general decline in economic outlook that lasted into the 80's, when Reagan spent our way out of it.

    Through all the ensuing years, I've wondered about the rationale of Detroit, the government, and people in general, who recovered and quickly forgot the impact of that glitch in the oil supply. The initial flurry of fuel efficient imports was quickly drowned out by bigger and thirstier American cars, and that trend has never stopped.

    I recently decided to buy a new car. I had no idea there even were tax incentives. I looked at a Scion Xa and a few other small, fuel efficient cars, as well as the Prius and Insight. I will buy a fuel efficient car, regardless of incentives. Even with incentives, the hybrid cars are more expensive to own, but recent events have shown that gas prices can skyrocket overnight, and if that is a continuing trend, and I believe it will be, those statistics could change and hybrids will begin to look better and better.
  • mfusaromfusaro Member Posts: 6
    thanks for the info, blane.

    At the time, I wasn't aware there were any incentives. It occurs to me that he was probably fishing for an easy sale. He had two new Prius on the lot and was probably hoping I'd buy one on the spot. As it turns out, I was undecided and wanted to do a little more research before making a commitment..
  • blaneblane Member Posts: 2,017

    Have you sat in an Insight? You may find that you would have to make too many compromises in comfort, useability and driveability. You might want to look at the Civic Hybrid too.
  • mfusaromfusaro Member Posts: 6
    Hi blane,

    No, I haven't tested an Insight yet. Frankly, the only thing I really like about it is it's fuel economy. I'm not impressed by it's design (hate that lack of rear wheel well), but I am willing to make some compromises. This will be the first new vehicle I've ever purchased that I will select for intellectual, and not emotional reasons. I've already decided to go back to a manual transmission (recently rebuilt my Dodge automatic trans for the 2nd time), regardless of what I buy, and I'm willing to accept that the 'get up and go' factor may be lacking in some situations. I can get by with limited seating, but would prefer to be able to carry more than one passenger. Between the honda and the toyota, I do prefer the Prius, and since both are overpriced to about the same degree, it's difficult to make a decision based on the sticker.

    I did research the Civic. I'm equall unimpressed with the design of that car, however, there may be significant differences in comfort and driveabililty, between the that and an Insight.

    I've read some customer reviews that expressed disappointment in the Prius mpg, which seems to fall somewhere far below what's advertised, so I have reservations about that car too.

    I guess that's why I came to this forum. I'd like to find out what owners of the respective cars think about what they're driving, and hopefully get the benefit of the research that others have done. I thank you for your comments. That's one more thing to consider, before making a purchase.
  • gagricegagrice Pahrump, NevadaMember Posts: 31,450
    I've already decided to go back to a manual transmission

    That will limit you considerably buying a hybrid. Your only real choice is the Civic hybrid with manual shift. The Insight manual transmission car is very difficult to find. And it appears that the 2006 Civic hybrid will only be offered with an auto transmission. All the other hybrids are Auto, including the Prius. Good luck with your purchase.
  • mfusaromfusaro Member Posts: 6
    Hi gagrice,

    Thanks for your comment. Let me elaborate on what I posted earlier. I looked at several non-hybrid cars, including the Scion Xa, which boasts 38 mpg. All of the non-hybrid cars appear to gain a few mpg with manual transmission. My point is that I'm willing to drive a manual transmission, but not determined to do so. I'd be more than happy to find a reliable vehicle that gets great mpg with automatic transmission. The fact that manual transmissions are less likely to break down and easier to repair is just an additional benefit.

    My dilemma, at the moment, is that since I tend to keep my new vehicles for 7 to 10 years, I have some reservations about new technologies and the possibility of huge repair bills down the line, or simple obsolescence as new, and improved technologies appear on the market. I'm torn between purchasing a lower priced(significantly) conventional vehicle with good fuel economy or a far pricier hybrid vehicle that gets great mileage, that may be outdated, 3 or 5 years down the line, and may be a mechanical nightmare if something goes wrong.

    As you can tell, I don't purchase new cars as often as some do, so I'm less likely to make a snap decision, based on the fact that if things don't work out, I'm bailing out in 3 to 5 years.

    Aside from the fact that the hybrids are more eco-friendly, the data seems to show that mile for mile, the hybrids are still more expensive to drive, despite the price of fuel, so I'm torn between buying a conventional car, for far less, and waiting a few years to see what happens, and jumping on the hybrid bandwagon and taking my chances.
  • mfusaromfusaro Member Posts: 6
    PS. My favorite (hybrid), in terms of styling, convenience, comfort and price is the Prius. I hesitate because I've read that the mpg is significantly less than advertised, which kind of defeats the purpose.
  • falcononefalconone Member Posts: 1,726
    Check out and you will see a compilation of real world mileage on all the hybrid vehicles. You can easily get mid to high 40's with a Prius. Most of the people I know are getting between 48-52 on average.
  • Kirstie_HKirstie_H EdmundsAdministrator Posts: 11,132
    Hey folks,
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    Hybrids: Toyota Prius vs. Honda Civic Hybrid v. Honda Insight v. ?
    Any downside to buying a hybrid?

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  • cal_calcal_cal Member Posts: 39

    I drive the accord hybrid. It is not a sci-fi car. It looks and drives like a conventional car but gives you a higher mileage. These cars can be found below invoice if you do your homework so you wont be paying much premium over a gas only car. It is a nice, powerful car with lots of high end features. In the worst case scenario, even if the hybrid portion fails, you are still left with a regular 240hp V6 to drive you around.
  • midnightcowboymidnightcowboy Member Posts: 1,978
    even need a tax credit or tax incentive ?

    Just wondering? Some people above are talking about not getting the advertised mileage. I though even with the advertised mileage the payout was still 5-7 years. Maybe closer to 5 years now with higher gas prices.

  • zacharyazacharya Member Posts: 71
    What payout? The HCH (06) will yield a $2200 tax credit, the Prius will get you $3150. If you get a mid level Prius you can effectively change the price to below 20k if you count in the credit. I sure hope gas prices go down.... I now have to spend $33 to fill up my tank and it lasts me 3 weeks.
  • midnightcowboymidnightcowboy Member Posts: 1,978
    "What payout?" TCO of ICE versus equvialent Hybrid at plus $2,000-$3,000. Remember the difference between a credit and a deduction, on a credit assuming you itemize it only reduces your tax liability yielding at most 38%

    My point is that if hybirds were truly economical , then there would be no need for
    any tax incentive: credit or deduction. By they are not, so therefore the incentive to entice people to buy hybrids.

    No for voodoo economics. Let's say youpurchase gas every 3 weeks at $33. For simplicity that is $44 per month. Let's say you trade fro a Prius and now only pay half of $22 per month. That is a gas savings of $22 per month. You trade in you current car, assuming it is paid for, and get a great trade-in and you buy the Prius at a great price with a net monhtly payment of say $222. Total economics is that you are paying $222(car payment)-($22 gas savings)= $200 more. But wait you get a tax creadit of $3000 and save 38% = $1,140 on next years taxes. Did you come out ahead no.

    But the example people really like to use is they have the Gas guzzler SUV now and spend $300 per month on gas and a SUV payment of $500. Now they trade in their SUV ( hopefully the finacing is not upside down) and buy a Prius with a net payment of $250 and a monhtly gas bill of only $100. Previous monhtly outlay was $800 per month and new outlay is only $350 per month for a savings of $450 per month. "My hybrid saves me $450 per month" Wow if that is true why the tax incnetive one asks. Becuase that is voodoo economics, becuase you are comparing apples to oranges. Assuming a ICE only Prius existed; compare it to a hybrid Prius If the real goal is bottom line and TCO then you pick an inexpensive economy car (the Prius is an expensive car with good gas mileage) with gas mileage not quite as good as a Prius. Let's say you car payment is now only $175 and your gas cost is $125 for a total monthly cost of $300. Then the Prius would end up costing you $50 a month instead of saving you any money; hence the tax incentive.

    Keep you current car! Better economics!


    27 mpg in a 6-speed performance vehicle MidCow
  • jmc0816jmc0816 Member Posts: 8
    There is a NY Times article dated 9/5/05 discussing Toyota's hybrid sales. It alarmingly references the 2006 tax credits not being available for Toyota purchases; only domestic producers.

    link: 26105246-uyVkdWrgafkQLpxHy9MQpg

    Exact language:
    "At the same time, the energy bill signed by President Bush on Aug. 8 effectively gave a break to American manufacturers by extending what could be a tax credit of as much as $3,400 per car to purchasers of the first 60,000 hybrids sold by a company. The credit phases out after that. Toyota sold more than 60,000 hybrids in the first six months of this year, so the tax law seems intended to help General Motors and Ford."

    Is the 60,000 limit retroactive to the first hybrid sold by a manufacturer, ever? Or does the 60,000 limit begin with the first sale in 2006?
  • otis1otis1 Member Posts: 142
    I don't have the exact link, but it's been discussed here. The credit is good for the first 60,000 (+ 2 quarters) cars sold AFTER DEC 31, 2005.
  • gagricegagrice Pahrump, NevadaMember Posts: 31,450
    If that article in the Times is factual it will be a blow to Toyota and Honda. They have both sold more than 60,000 hybrids to date. I have not seen any tax credit information from the IRS that states what vehicles are included. Only links where people have calculated from what they are seeing in the Energy Bill. Anyone have a link from the government that refutes the NYT article?
  • otis1otis1 Member Posts: 142
    On the bottom of p 1417 to the top of p 1418 shows the language regarding the limitations. It says nothing about american manufactures- just 60,000 hybrids sold after Dec 31, 2005. You can find the link to the bill if you search this forum. In fact that language is in the first 3 lines of p1418.
  • gagricegagrice Pahrump, NevadaMember Posts: 31,450
    I should know better than believe the New York Times on anything they put out. I'll pull it out and read it for myself. Thanks.
  • jmc0816jmc0816 Member Posts: 8
    Thanks. I didn't really trust the source either, but thought it was worth further investigation.
  • toycashtoycash Member Posts: 139
    I think what they were talking about is the fact that this new law helps the domestics more than it helps Toyota and/or Honda. It seems that it was designed to make up for the fact that the domestics are way behind on this technology. Toyota will sell 60,000 hybrids in less than 6 months, and then they will be done.
  • mi_satmi_sat Member Posts: 42
    Remember the difference between a credit and a deduction, on a credit assuming you itemize it only reduces your tax liability yielding at most 38%

    You've got that backward. A credit is a dollar-for-dollar reduction in tax liability. (Ex: a $3,000 credit yields a $3,000 REduction in tax liability.)

    Also, the highest marginal tax rate is 35%, not 38%.

    I guess "YMMV" means Your Math May Vary. :)
  • allan6allan6 Member Posts: 1
    The dealer was not exactly misleading you, he was quoting facts right off the official IRS web site. It states that cars that qualify as clean burning fuel vehicles can be eligible for a tax deduction of up to $2000, and the Prius qualifies. It also states that the deduction will be reduced to $500 in 2006 and will disappear in 2007. That's the law of the land right now.

    This thread discusses the new tax credit available after December 31 of this year for certain vehicles, including hybrids, contained in the recently passed energy bill. As you can tell by this thread, the new legal verbage is ambiguous, confusing and subject to interpretation. We can "what if" about it until we run out of gas but the only interpretation that matters is the one finally made by the IRS and nobody knows when that will happen. And, if its interpretation is fair, logical and easy to understand I'll be in shock and awe...
  • midnightcowboymidnightcowboy Member Posts: 1,978

    Thanks for both corrections you are right on both accounts. Max tax rate = 35% and I was trying to clarify deduction versus credit and wrote it too quick; the point was the savings is not as great as people think.


  • kdhspyderkdhspyder Member Posts: 7,160
    The reporter wrote...
    "Toyota sold more than 60,000 hybrids in the first six months of this year, so the tax law seems intended to help General Motors and Ford." ...Huh???

    This is very poor and shallow writing by the NYT reporter. It leaves the impression that the incentives are mainly directed to the domestic industry and away from Toyota and Honda. However just reading the summary of the legislation it's clear that the limit for the credit is 60000 vehicles thereafter declining in subsequent quarters.

    60000 is 60000 it doesnt matter when the incentives are taken. There is no advantage intended to one manufacturer over another. It's just that Toyota and Honda buyers will be able to take their incentives NOW in today's dollars rather than waiting several years for GM/DC and the others to get up to speed.

    It's true that Toyota would love to have the limit be 200K or even 1 Million units but thats not feasible.

    That being said.. there is a HUGE difference in the actual incentive due to a new buyer beginning next year depending on whether the vehicle is a full hybrid with significant gas savings like the Prius or whether it is a 'mild' hybrid like the Accord or eventually the Avalanche where the gas savings are minimal. In this case the Toyota buyer makes out much much better.


  • kdhspyderkdhspyder Member Posts: 7,160
    I've been selling the Prius since its genesis here in the US in 2001. The 'incentive' has been clear since the beginning that the $2000 allowance is a reduction in income similiar to an IRA deduction. In fact it is reported in the same place on pg 1 of form 1040. It reduces your Adjusted Gross Income ( AGI ) by $2000 in the year taken. Thus what would be a $102000 AGI is only $100000. This normally results in a $500-600 Tax saving for most people.

    The new Energy bill is MUCH better for the potential hybrid buyer in 2006. The incentive is a direct tax reduction by as much as $3000 depending on the calculated gas saving in the vehicle class. Full hybrids will probably be subject to much larger incentives than mild hybrids; for example $2800 vs $800. This tax reduction is direct money in the pocket of the buyer. Thus a potential Prius buyer would get 4-5 times as much in his/her pocket next year as opposed to this year.

    This tax saving brings a $24000 mid-range Prius down into the same price level as a 4c Camry or Accord with Auto trans. A top-of-the-line Prius would be several thousand less expensive than a top of the line 4c AT Camry or Accord.


  • ryandenverryandenver Member Posts: 4
    I just ordered an 06 Escape Hybrid to take delivery after Jan 1, 2006 to take advantage of the new incentives.

    Based on estimates I've seen, the AWD Escape will qualify for a 1950 federal tax credit. On top of that, Colorado offers a 2797 state tax credit bringing my tax credits to 4747.

    When I factor that in with the ford xplan pricing, I get a car payment of about 450.00/mth. Currently I'm driving a 2002 WRX with a monthly payment of 307/mth and getting about 21mpg. So, doing the math that means that if I spread the effects of the credits over the life of the loan (6yrs) equals 66/mth in rebates, 80/mth in gas savings, and 30/mth in insurance savings. So effectively I come out with a net savings of about 20/mth over thos 6yrs.

    That being said, it all depends on what your goal is and what your replacing. As has been said, if you're trading in a moderate to low fuel mileage car and have a car payment, it makes financial sense. If you don't have a car payment, or have a high fuel economy car, it might not make financial sense, but might make sense from a ecological consciousness stand point.

    All I can say is I can't wait, the next 14wks are going to be hard to bear.

  • stevedebistevedebi LAMember Posts: 4,098
    "When I factor that in with the ford xplan pricing"

    Out here in CA, the Hybrid is not in the plan pricing. Or is this the employee discount rather than the family plan?
  • mirthmirth Member Posts: 1,212
    ...are not be sold with employee pricing. Even if the employee pricing applied to them, it's the decision of the individual dealers whether they want to honor that, and why would they?
  • gagricegagrice Pahrump, NevadaMember Posts: 31,450
    This is very poor and shallow writing by the NYT reporter

    Has anyone found a link from the government that says the tax credit amount each hybrid will be entitled to? They have the figures on the old incentive. I have only seen speculation at this point. Maybe the NYT writer got some inside information. Is it spelled out in the Energy bill that past sales are not included? I would not count my money till I see it in the tax code.
  • zacharyazacharya Member Posts: 71
    I would not trust anything I read in the NY Times. One thing is certain and that is that in order to get the credit, the purchase will have to be made in 2006. I've read that the HCH will entitle you to a $2,200 credit and the Prius ~3,150. I have a feeling the Prius will be closer to $2700, just based on other sites which quote that amount too. Does anyone know if any diesel cars are entitled for a credit? Once clean diesel is here, I think the government should give us an incentive to buy them. That may encourage other manufacturers to bring them to market.
  • gagricegagrice Pahrump, NevadaMember Posts: 31,450
    The diesels are entitled to a tax credit also. BUT, they have to pass the EPA emissions. That will not happen until the mandated ULSD is available. The earliest I would expect that to happen is late next year. I have seen two or three figures on the Prius tax credit. It would be nice if the IRS would get that out. We may not have it until they put out the 2006 tax code info late next year. It will be like a Christmas bonus the first of 2007.
  • midnightcowboymidnightcowboy Member Posts: 1,978
    Your logic is true, only if your Escape and WRX loans are coterminious which I imagine they are not! How many payments did you have left before your WRX was paid off ? Let's say you had 2 years left on your WRX. Using simple math The first two years your cost difference would be ($450-307)= $143 while the last four years of your six year loan the cost would be ($450-0)=$450 So lets say, again using simple math, you net cost not accounted for would be $307*4years*12 months per year = $14,736 Now take your $20/month savings over 6 years= $20*6*12= $1,440 for a net loss of $1,440-$14,736 = $13,296 total or an effective loss of $184.67 per month. Now if you still had six years of payments left on your WRX and you replaced it with the Hybrid six yerar of payments , then the loans would be coterminious and yes you would save $20 per month effectively. But I think you are really probably losing $184 per month. Maybe less because the residual value of the Escape migth have a net asset value positive over the WRX.

    Cost On,

  • stevedebistevedebi LAMember Posts: 4,098
    "Your logic is true, only if your Escape and WRX loans are coterminious which I imagine they are not!"

    Yep, people often forget in the "cost analysis" that you have to figure in the amount of the loan you have already paid on your current vehicle, plus the loss on the trade, etc.

    Buying hybrids (or any car) only make sense if you are really in the market for a new car anyway. It seldom works out to the $$ advantage is you are still paying on your current car.
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