More Consumer Reports rants

What I'm saying is something like what Sy Syms used to say, in reverse "An educated consumer is not one of CR's best customers any longer."

 

As I long time CR subscriber, I have to admit I didn't bother getting their advise when I purchased my first Prius in '04 and the PiP in 2012. You have to take their advise in perspective along with other reviews (like "Understeer occurs at low speeds and body roll is pronounced" - forgive my ignorance but what the heck is understeer?) and your own, since most of the time you have the car for one heck of a lot longer than any car reviewer. However, since they drive each car almost identically over the same track in exactly the same way I feel they provide a great comparison to other cars for things such as gas mileage. Diesel owners must groan every time they see high or mid 30s for overall mpg for any of the diesels CR has driven when diesel owners themselves report they've been getting low 50's (they kind of blanch when I show them my lifetime average is 96). Even with the way CR drives cars, the Prius is still tops in MPG. It is humorous they don't really know why nor can they report on potential.

 

[QUOTE="fortytwok, post:

Its a little hard to imagine someone buying a car for over 20k yet paying almost no taxes over the year - remember its not your tax bill when you file - its if you'll have paid $2500 total. A quick analysis shows if you made 25-30k then you'll qualify for the fed tax deal.[/QUOTE]

It's hard for me to imagine how one with income can pay no taxes, much less 49% of Americans, but if your federal tax liability is 0 before taking this tax credit then you won't qualify for it.

 

honestly, if you don't pay $2500. in federal taxes, except in a very few cases, you shouldn't be looking at a pip. edit: sorry guys, didn't see your posts.

 

Charles, how many people bought a home and couldn't afford it, thus causing the worst economic collapse since the Great Depression? Is it that hard to get a car loan?

 

well if they bought a pip and had no federal taxes? good on them! as long as o'bama doesn't try to bail them out.

 

It happens, and it is not rare. However, I have no idea what fraction of the $20k+ car buying populace are included. As one example for you, I do not pay federal tax although my annual income is usually 200k - 300k. This happens because we live modestly and are able to shelter most of the income in retirement funds. We use taxed savings from years past as required.

Your 'quick analysis' is mostly if not entirely wrong because of other deductions and credits. The car credit cannot push you into negative tax liability.

 

This is an important point. Someone who drives dozens of different cars a month is certainly going to view things differently than those of us who normally drive one car almost all the time. That constant exposure to a range of cars at a range of prices is bound to influence how you view things. Whenever reading a full-time car reviewers opinion of things we have to remember they're exposed to some really expensive, luxurious, and/or performant cars that most of us will never drive, and that's bound to have an effect on their perception compared to ours.

 

And your driving range per trip!!

 

exactly.

 

that's BS - someone making 200-300k and not paying any fed tax is the rarity !
a normal situation is as I described, in fact my daughter - first year out of college made just 28k and could've taken advantage

I'd consider that almost poverty level depending on where you live and don't forget those types don't have a slew of deductions.

 

I don't know how rare my situation* is, but in any event I only mentioned my case as one example to help your imagination. Many other variants exist.

*I do know that e.g. my city has a long list of actuaries who make a living handling the kind of retirement fund that I use to shelter my income. That does not make it as common as a failed GM transmission, but it is a whole lot more common than a failed Prius battery

 

Not wanting to wander further off topic (but you opened the door), I thought there's a cap on income that can be placed in retirement funds, at least pre-tax contributions to 401(k) or 403(b) accounts. For example, $17,000/yr for most, around 25,000 for those over 50. How one could legally shelter as "retirement" $185-$285K (figuring your first $15K of taxable income could result in a near zero tax liability) seems unlikely. Not saying it's impossible, but you must indeed have a very unique source of "$200K-$300K" annual income.

 

With my federal tax credit, state rebate, and county rebate, I ended up paying less than $22K after TTL, which is less than any Prius 2, but also got Nav, heated seats, plug in capability, and green HOV stickers. If those rebates apply to you, I can't see any financial reason to purchase a regular Prius. High power costs are a non-factor, as you can simply choose not to plug in. Smaller gas tank? I think 500+ miles range even without charging is plenty. Lack of a spare can be a concern, but you can carry one in your trunk if you're that worried.

 

that's correct rxlawdude - if his example really exists or the "many other varients" its certainly miniscule and doesn't apply to the masses getting their Fed tax back on a PiP purchase. I'd like to hear more of these shelters - you can't even take more than $3k in stock losses per year

in addition - if you did manage to save a bundle in a tax deferred 401k or IRA - in retirement you're forced to take annual distributions based on life expectancy once you hit age 70 1/2. So using realistic numbers - if you've got 1.5 million in there at age 75 you'll be forced to take over $100,000 annually and that's all income.

 

rxlawdude,
Close enough wrt to 401k

I think it was 23.5k per employee over age 50 this year. Two people with that deduction in my family = 47k
We are eligible for IRAs, so 6k per person = 12k

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That is ~ 60k a year for two person working families. Add in at least a standard deduction, personal deductions, perhaps some credits for children, and it is easy to see that a large group of people are not forced to have a federal tax liability until income approaches 100k. As I said before though, 'standard of living' and pre-existing savings are important variables, at least in my case. To answer your question, my income is from my work as a physician, paid to my company. The setup is common for small businesses and professionals.

A large chunk of my additional tax shelters are from participation into a pension plan, also called a defined benefit plan.

Fortytwok, I hope you are not so clueless and arrogant in everything you do.

Look up the rules for beneficiaries if you are interested.

Saying the number of people who are able and clued-in to strategies to reduce federal taxes is 'miniscule' is like the owners here who think *their* mpg is 'real world' and everybody else is lying LOL

However, if you want to talk minuscule, calculate the fraction of cars being sold today that are PHEV. Because remember, the question was whether the people who might be interested in buying a PiP (or other *EV) are eligible for the tax credit. So while people with high annual incomes who shelter income is most certainly less than 5% of the households in the US, the fraction that are buying the PiP are clearly much less than 1%.

Does that leave a large number, and perhaps 20%, of the country households with the means to buy a PiP and able to take the tax credit ? Sure. The simple point I am making, that you are having trouble grasping because you think everybody is like you, is that it is hard to guess what number of people who are means able and interested in *EVs are not eligible for the tax credit.

 

Bisco, Would you buy my pip? I just found out I did not qualify for the tax credit, and I can't afford the car. Help!!!!............

P.S. What is the phone number for the fed's to bail me out! Sounds good to me!

 

i'll make you a deal you can't refuse.

 

on the other hand, at 2-300,000. a year, i would buy a pip over a lift back just for the fun of it. in fact, that's exactly what i did. and i imagine a lot of expensive cars are purchased by people who don't give a hoot about 'value' as interpreted by the likes of cr and others.