[scottinmt]

I've noticed that certain folks on ebay are listing used hybrids claiming that they are eligible for a $2000 tax credit. I thought that the tax credit was only applicable to new car purchases and to the original owner? I also thought the tax credit dropped to $1500. Anyone know for sure how this works?

 

[Resist]

You are correct this only applies to NEW Hybrids. And the Insight does not qualify for the Tax Credit. It qualifies for the deduction. I believe Hybrids with a power system like the Pruis are even in a grey area taking the Tax Credit.

 

[LoNOx 1]

Go to : http://www.fueleconomy.gov/feg/tax_hybrid.shtml
to read about the qualifications for the Insight deduction for a Federal Tax Credit.

 

[ethicalpaul]

Go to : http://www.fueleconomy.gov/feg/tax_hybrid.shtml
to read about the qualifications for the Insight deduction for a Federal Tax Credit.

Deduction, not Credit!! Big difference!

 

[atlaw4u]

I'm trying to determine which will be a better course - purchasing a new Insight with the $2,000 deduction which of course would include the new car Warranty. The MSRP on an 05 MT is roughly $19,500. My second thought would be to purchase a used Insight with less than 50K miles which I have priced for around $10,000. However, considering I am located in Dallas any purchase will probably require buying out of state sight unseen and shipping which will add about $1,000 to the purchase price. Thus, I can get a used Insight for around $11,000 or a new one for roughly $19,500 minus the $2,000 deduction. I'm unsure what amount the $2,000 deduction would actually reduce the purchase price since this is not a pure tax credit. Any input would be appreciated.

 

[atlaw4u]

I'm trying to determine which will be a better course - purchasing a new Insight with the $2,000 deduction which of course would include the new car Warranty. The MSRP on an 05 MT is roughly $19,500. My second thought would be to purchase a used Insight with less than 50K miles which I have priced for around $10,000. However, considering I am located in Dallas any purchase will probably require buying out of state sight unseen and shipping which will add about $1,000 to the purchase price. Thus, I can get a used Insight for around $11,000 or a new one for roughly $19,500 minus the $2,000 deduction. I'm unsure what amount the $2,000 deduction would actually reduce the purchase price since this is not a pure tax credit. Any input would be appreciated.

 

[apierpoint]

The deduction only allows $2,000 off of your income, so you would not get $2,000 back. It would depend on what tax rate you fall into as to how much... Here is the IRS link:
http://www.irs.gov/newsroom/article/0,, ... 66,00.html

If you're a fan of Dave Ramsey as I am, you'd be better off buying used.
http://www.daveramsey.com

Good luck!

Andrea

 

[Madeline]

Making about $34,000 a year, filing as a single person and taking the standard deduction, the Insight $2,000 deduction equalled me paying $300 less in taxes.

I'm not sure if the hybrid deduction is $2000 for 2005, though. I know it was being phased out even in 2004 (I think it was going to be only $1500), until Congress specifically voided the phaseout for 2004, but I'm not sure if they voided the phaseout for 2005, too. So the deduction you get might be only $1000 or $500.

Used is a good option, I think. Why not fly to the place where the Insight is and drive it back? Plane ticket = $350, gas on trip back = $100, hotels on trip back = $150, boost in MPG from so many highway miles: priceless...