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Tax credits / incentives for hybrids?

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Comments

  • Ok you have a point, but I'm only into my WRX loan a year. I bought the lease out last year, so the first few years of leasing are sunk costs regardless. So, yes, 1 yr of payments is sunk and I'd have a year of additional payments on the hybrid. But considering month for month with with the assumption that I"d have a payment regardless, it comes out with a savings. I typically don't keep vehicles long enough to pay them off anyway.

    As for being in the market for a new car, I am. My WRX is not large enough to carry my snowboard gear internally and as I compete around the US and Canada on the NorAm tour, I need something I can haul my gear in with passengers without having to use a roof rack and expose my boards to road chemicals which eat it alive.

    As for xplan, each dealer invoice for the hybrid, mustang, etc has the xplan price listed. It is up to each dealer whether they honor it or not on any vehicle at any time. Before ford redid the ford partner website and began the employee pricing deal, it also listed xplan on all dealer inventory right on the website. Some dealers here are honoring the price and some are not just as some are charging MSRP and some are charging MSRP plus 5k. There's one dealer in the Seattle area that is honoring A-plan to the public on them as part of the current Ford promotion. All I can say is shop around if you qualify for either promotion.
  • I plan to lease a hybrid car. Do you know if tax incentive will apply if I lease the car instead of purchasing one?
  • falcononefalconone Posts: 1,726
    Only if you buy. Doesn't pay to lease.
  • larsblarsb Posts: 8,204
    quote aaron_t-"Does anyone know if a second owner is elibile for the 2006 tax credit or does this only apply towards first time titled?"-end quote

    Tax credit is applicable "only for the first time use as a new purchase" of the vehicle. No used hybrid or leases qualify.
  • gagricegagrice Pahrump, NevadaPosts: 31,432
    I would not spend that tax credit till you see it on the IRS website. The state of Alaska has already had two big projects postponed/cancelled due to the hurricanes. Money slated for one bill can be used on other things as Congress sees fit. If Congress decides that the hybrids don't need any help, they can defer that money to other bills. It may be wise to take the existing deduction and get your hybrid before the end of the year.

    NOTICE: New legislation has changed the tax incentives for hybrid vehicles. Hybrids placed in service by December 31, 2005 are still eligible for the tax incentives described on this page. Hybrids placed in service after this date will no longer be eligible for these deductions but may be eligible for a federal income tax credit under new legislation—the amount will depend upon the vehicle's fuel economy, estimated fuel savings, and other factors.

    http://www.fueleconomy.gov/feg/tax_hybrid.shtml
  • larsblarsb Posts: 8,204
    quote gagrice-"I would not spend that tax credit till you see it on the IRS website."-end quote.

    Depends on how fast you file your return. If you get the car on Jan 7th, file your taxes on Jan 10th, you can bet your bottom dollar you will get the tax credit.

    Once you file, the credit is yours. There are no "take backs" at that point.
  • gagricegagrice Pahrump, NevadaPosts: 31,432
    Did you read the notice? NO credit has been established under the new legislation. How can they determine the gas savings on a Prius when it does not replace an existing gas only model? When any other car is compared to the Prius here on Edmund's it is touted as incomparable. Don't you think the IRS people determining the credit will have a difficult time making that determination? It was simple under the old incentive. You buy a hybrid on the IRS list you get the $2000 deduction. I think that bill has created more questions than the IRS will have answers for. We should know by about the first of December.
  • falcononefalconone Posts: 1,726
    Most are guessing that the credit for the Prius will be from $3k to 3.2k. It will be interesting what the final numbers actually are. I have no idea why the IRS would even get involved in the determination. That's are DUMB government at work.
  • kdhspyderkdhspyder Posts: 7,160
    The details matter greatly.... if you take delivery on Jan2 2006 then likely(?) the credit will be allowed on your April 15 2007 tax return.. a year later.

    The govt will have your $3k(?) interest-free for a year or more. Lots of details to sort out.
  • larsblarsb Posts: 8,204
    Yep, you are absolutely correct. The current (2005 calendar year purchase) puts your tax deduction with the 2005 tax filing, which is done in 2006.

    So the 2006 Calendar year purchase will put your tax credit in with the 2006 tax filing, done in 2007.

    I sit corrected !!! ;)

    My overall point, however, was thatGary had pointed out how one might need to be worried that the tax refund might get changed or reduced or eliminated, and my point was that if it is ON THE BOOKS as a valid deduction WHEN YOU FILE, then you are guaranteed to receive it. The change in tax laws cannot modify your current year's filing after you have submitted it.
  • stevedebistevedebi LAPosts: 4,098
    Yep, unless Congress changes the law (unlikely), the credit wll be available. It is now signed into law.
  • stevedebistevedebi LAPosts: 4,098
    Thanks for the link, but I think everyone here is waiting for the IRS to weigh in.
  • falcononefalconone Posts: 1,726
    No prob.

    How much different do you think the IRS will be?
  • gagricegagrice Pahrump, NevadaPosts: 31,432
    How much different do you think the IRS will be?

    It is a crap shoot. You know that Honda will pitch a fit if they use the flawed EPA estimates on mileage. My question is what comparable vehicle from 2002 did they use for the Prius calculation? If they use the first generation of Prius there is little gain in mileage with the Prius II. It may even be as long as late next year before they make the determination. You won't be able to claim it until January of 2007 for the 2006 tax year. A lot can happen in that length of time.
  • falcononefalconone Posts: 1,726
    True.. but I am not buying the car for a tax credit. Whatever they give me I'll take.
  • kdhspyderkdhspyder Posts: 7,160
    Here is a question I have not seen answered and cant google an answer for either. Forgetting what the actual credits will be is there any statement that anyone has found about how MANY vehicles one taxpayer ( joint ) may purchase and still receive the credit. Can a H/W each purchase a hybrid and claim 2 credits? Must they file separately that year? Can a parent purchase hybrids for all his children ( 10? ) and claim 10 credits?
  • gagricegagrice Pahrump, NevadaPosts: 31,432
    Good question. I could buy 10 Prii reduce my taxes to zero, then sell them all at a profit on eBay, hmmmmm
  • falcononefalconone Posts: 1,726
    Ya know Gary... you may have something there! I am sure there is a limit on how many deductions you can take. If not, you should really think about it. The problem is you'd have to register and insure every one.
  • gagricegagrice Pahrump, NevadaPosts: 31,432
    I imagine that will be watched by Uncle Sam. It is a good question though. And I would hate to get stuck with ten Prii and the bottom fall out of the market.
  • kdhspyderkdhspyder Posts: 7,160
    I think this may be part of the reason that the IRS has not published anything yet.. The details are everything.

    If it is ONE Credit per return, joint or separate, then if one person or family purchases say, a Prius, Camry and Highlander.. then only one vehicle counts toward the 60000 unit cutoff ( which one? )... details, details, details. That is why there is a full credit for one quarter AFTER the 60000 limit is attained.

    Scenario: ( As I understand it )
    70000 units are delivered in the first 2 qtrs of 2006 but only 60000 get the credit due to multiple vehicle purchases by the same taxpayer... now EVERYONE who gets a Hybrid in 3rd quarter gets the credit unless they also got one in the previous two quarters ( or the 3rd Qtr ).. details, details..
    So 'Yota, Honda et al, have to report their Hybrid RDR's to the IRS every quarter to tell the Feds when the probable 60000 limit is reached.. wow.. more details..
  • gagricegagrice Pahrump, NevadaPosts: 31,432
    I think this may be part of the reason that the IRS has not published anything yet.. The details are everything.

    As if the tax code is not complex enough as it is. I think it was simpler the way it was. I would imagine each manufacturer will have to promote their vehicles as they did with the current deduction. I don't think the IRS will publish the credit until the end of 2006 as part of next years tax code. The information that comes out the end of this year is for your 2005 tax return. So the IRS will have all next year to hash it out.
  • kdhspyderkdhspyder Posts: 7,160
    Yep I believe you are spot on this.
  • otis1otis1 Posts: 142
    like someone said, let's wait to see what the irs says. but here's my take:

    re: claiming 10 prii credits- i think I remember reading that you can only claim the credit on cars that you plan to drive- not cars that are for resale. so if you run business and have 10 company cars- then that's ok. if you buy 10 cars and sell 9 on ebay, that's doesn't count.

    re: comparison to non existant 2002 model: the credit is based on the 2002 numbers for EPA gas mileages for various weight classes. so you're not comparing a 2006 honda civic hybrid to a 2002 gas civic- you're comparing the city mileage of a 2006 civic hybrid to corresponding weight class mpg from the 2002 data. currently I don't understand how this weight class is determined (I actually went into the us laws that were referenced in this new energy law and couldn't find the info).

    re: 60k limit- look back a few pages on this forum, the credit gets phased out 2 quarters AFTER the quota has been reached.

    Here's my idea on what toyota should do. I think they are projected to sell over 200k hybrids next year. that means they could easily sell over 50k hybrids in the first quarter alone. with the new tax credit, its not inconceivable that demand will be much higher and they could easily blow the 60k quota in the first quarter alone leaving only Q2 to take advantage of the full credit. Toyota should HOLD BACK sales of hybrids to 59,000 hybrids in Q1. that way they have until Q3 (sept 30) for customers to take advantage of the hybrid credit. they'll sell more cars this way because toyota gets an extra 3 months to sell "discounted" hybrids.

    THe added benefit of this is that by Q4, the camry should be ready to help "revitalize" hybrid sales (plus they'll get 50% of the credit- not too shabby). my hope is that the 2007 HH will be available by Q1 2007 so I can get the 50% credit then.
  • I'm amazed congress (both parties) has so eagerly gulped down the hybrid Kool-Aid. It's bad enough self righteous do-gooder greenies get a tax break for sending money to Japan (the nation with worlds WORST environmental record). Then they have to give my tax money to the rich folks buying the RX400h. The fact that any car over 25K qualifies for any tax break is ridiculous. The fact that the extremely wealthy can buy an RX400h and get a tax credit on their 50K car is just obscene. This calls for a new term the "Welfare Fat-Cat Environmentalist". I can't wait to meet my first RX400h owner to give him or her a very hard time. Hypocrisy knows no limits in the good old USA! :mad:
  • The details matter greatly.... if you take delivery on Jan2 2006 then likely(?) the credit will be allowed on your April 15 2007 tax return.. a year later.

    The govt will have your $3k(?) interest-free for a year or more. Lots of details to sort out.


    The entitlement mentality is alive and well. Spyder has already decided the special tax credit for buying a hybrid is "his" money. The poor folks who buy a new Echo or Aveo get no help with a tax credit, but the middle class and up get their feel-good hybrid tax credit and already consider it an entitlement. :sick:
  • falcononefalconone Posts: 1,726
    Echo is unavailable anymore. The Yaris has taken its place. Do you want a tax break on a $10k bare bones car? People that are getting the tax break are spending anywhere from 21k-27k for their Prius. Chances are, they will get mid 40's in city driving. Most you can get in an Aveo would be high 20's if you're lucky.
  • kdhspyderkdhspyder Posts: 7,160
    It is my money if I decide to buy a Prius just as it's your money if you also decide to buy one. It's always a personal decision. You can take advantage of it or not.

    The Prius is more efficient than an Aveo or Yaris in both FE and emissions. It deserves to be supported so that less efficient gassers get taken off the road. The person buying my '00 4c Camry (33 mpg) is coming out of a '95 V6 Astro Van smoker. So my future Prius is replacing a clunker. We all benefit from this exchange. I started it with a new purchase. Thats what we need to do more of.
This discussion has been closed.