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Discussion in 'Gen 2 Prius Main Forum' started by Springtime, Dec 6, 2005.

  1. Springtime

    Springtime Member

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    Eastern PA
    I had planned to order a 2006 for delivery in April. My local dealer seems to be having trouble getting rid of the 2005's - no one wants to loose the 2006 tax credit by purchasing prior to 1/2/06. (I am in no rush - I can wait until April if necessary.)

    Am I correct in assuming that a new 2005 purchased in 2006 will still be entitled to the 2006 tax credit?

    It seems I might have a little leverage here in negotiating a discounted price on a leftover 2005 if I wait until the first week in January to purchase. That combined with the 2006 tax credit might get me to seriously consider taking a leftover 2005.

    Anyone know how much margin the dealer works on for the 2005? I seem to recall somewhere I saw a figure of $1600. Now if I could get him to consider $1000+ off the MSRP and I could also get the $3150 tax credit I might consider taking a leftover 2005 on the lot in January.

    Of course there may not be any 2005's left by 1/2/06 - but if there are I think there may be some wiggle room regarding price.

    Am I reading the tax credit correctly? Is the dealer margin about right?

    Springtime
     
    #1 Springtime, Dec 6, 2005
  2. Kiloran

    Kiloran New Member

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    MSRP profit margins are between $2206 and $3000 dependent on package choice.
    2005 Model Year Prius Calculator, Excel Spreadsheet
     
    #2 Kiloran, Dec 6, 2005
  3. jeffn

    jeffn New Member

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    My dealer laughed when I told him about this scenario a couple weeks ago. I just chuckled under my breath but he may not have any 05s after Jan seeing how they sell here in NY.

    Make an offer! and watch new ones on Ebay at a discount.
     
    #3 jeffn, Dec 6, 2005
  4. chicobob

    chicobob New Member

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    Your not reading the tax credit quite correctly. It's my understanding the credit will be between $650 and $3150. It's indexed for your AGI. The higher your AGI the lower it is. An example I read was a single woman with one child making 40,000. Credit = 2,100. For me and my marginal tax rate the deduction from taxable income of 2K is more of a savings this year because I would phase out and only receive $650 next year. So, it worked for me to get my 2006 this year and not wait. Everyone's situation will be different though
     
    #4 chicobob, Dec 6, 2005
  5. Kiloran

    Kiloran New Member

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    I've read the tax code and I'm sorry to say that you have it completely wrong.
    Annual Gross Income (AGI) is not a factor in any way.
    The amount of the credit is based on the weight class of the car and its relative city MPG to the average city MPG for that class.
    The Prius' tax credit has been estimated at $3150 based on 2005 specifications (which have not changed significantly for 2006).
    The one potential clinker is that the credit will not reduce your tax burden below your Alternate Minimum Tax (AMT).
    You can find good coverage and related links about government incentives in the Toyota_Prius_FAQ.
     
    #5 Kiloran, Dec 6, 2005
  6. Kiloran

    Kiloran New Member

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    You probably walked away from ~$2500 but you're getting a nice car.
     
    #6 Kiloran, Dec 6, 2005
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