Purchasing a 2006 late in 2006?

well, i can only address these two... so here goes.

you will definitely be able to snag a tax credit in november or december of 2006, but it won't be as much as you could if you bought the car in march. the credit phases out starting at the end of the quarter *after* toyota sells 60,000 prii. so what actually matters to you is not how many have been sold, but when you buy the car.

if toyota sells 60,000 prii before march 30 (and i think that they will), then the following schedule will apply

through the end of 2006Q1, 100% of the credit is available.
through the end of 2006Q2, 100% of the credit is available.
2006Q3, 50%
2006Q4, 50%
2007Q1, 25%
2007Q2, 25%

so if you buy your car in december of 2006, you're looking at a maximum available credit of $1575 (depending on your tax bracket, etc.)

therefore, consider the interest rate you'll get on the car loan, and then determine if you'll save more than 1600 bucks by having more cash for your down payment. chances are that you *will* save more than 1600 bucks, especially if you put your car savings in an interest-bearing account of some kind. since you know that you won't need the money before november, find a savings account with good interest in exchange for a low number of withdrawals allowed.

but that's just what i'd do... as with all things prius-related, your mileage may vary.

cheers,
sam

 

check out ING Direct or some other internet banking system if you want to get as much interests as possible before you buy the car. My credit union offers 1.28 APY, ING Direct gives me 3.8 APY. You can transfer the money between your banks any time you want. ING Direct normally takes 2-3 days to do the transfer. So if you use them, you need to have few days lead to transfer money back to your own bank/credit union before you buy a car.

 

First, a minor correction to Sam's post. What the Feds will count (toward the 60K) is a manufacturer's total hybrids, which, in the case of Toyota, includes the Highlander and the Lexus as well as the Prius.

2. I wouldn't touch an '05 unless I got at least $2000 off MSRP. That's at least the amount of "annual depreciation" you'd incur as soon as you drove it off the dealer's lot.. Not likely, but not impossible, either. Depends strictly on an individual dealer's "glut".

3. Your projected possible credit of $1575 is still more than double the '05 amount you'd have gotten under the former deduction.

4. No, pkg #5s are not sold in all regions. But yes, all Toyota dealers have the CAPABILITY of swapping with a dealer in another region for one. It's just that most of them won't. No harm asking, though.

5. The '06 has more standard features, e.g., low tire pressure sensor, rear camera on all packages except #1, improved dash/door plastic, lower rear seat, better MFD, etc. The ONLY reason to get an '05, IMO, would be to save money via a discount.

Good luck! If you want to know how to check regions to see who has pkg#5s, PM me.

 

If you're looking to buy an 06 at the end of 06, I'd imagine that 07s would be hitting the showrooms by then or would be about to. I'm not sure what Toyota's schedule is, but if they followed the "normal" model year schedule (they didn't for 06), the next model year car should start hitting showrooms by end of August or beginning of September. For instance, I got my 04 Nissan 350Z right before Labor Day weekend in 03 (on 8/29/03).

Toyota will almost certainly hit 60K qualifying hybrid sales by middle of the year. From January to June 05, Toyota sold 53,308 Priuses in the US. Add the Highlander hybrid and Lexus RX400h to the mix as mentioned earlier.

 

I would like to offer another opinion on your savings question. If you can buy a Prius in June instead of November/December and save an addiitional $1,600 in taxes, this would cost less overall than saving for an additional 4-5 months for a larger down payment. If you put $13K down in December, your payments over 48 months at 6.5% would total $14,798.25 with $1,798.25 in interest. If you put down $7K in June and financed $19K over 48 months, your total payments would be $21,628.21 with $2,628.21 in interest. So waiting actually costs you $770 more. You could save even more by adding the additional amount you planed to save for the Nov/Dec down payment to your monthly payments, assuming no prepayment penalties. And I realize that I have not accounted for the interest earned on your savings, but, unless you earned more than 6.5% after taxes, $770 is the least you would save buying and getting the full tax credit. This assumes that you would be able to claim the full tax credit as well.

One additional thought - it may end up being possible to buy a Prius as late as September and claim the entire credit if the 60,000th Toyota hybrid does sell until April or later. Hope this helps.....JGK

 

We're thinking of buying a 2006 Prius "little brother" for my 2005, and with the current wait there's no way we'll get ours by March 31. Since I agree Toyota will most probably sell 60,000 hybrids before March 30, does the above schedule mean that as long as we buy our Prius before the end of Q2 (June), I'll get 100% of the tax credit?

 

(sorry to hijack this topic a little)
Darn! I totally forgot to consult w/the forum before I gave up my waitlist spot at Piercey Toyota (looks like you're here in Silicon Valley) and picked up my deposit check. I put my name on the list at end of November 05, but Sunnyvale Toyota came thru w/a car for me earlier even though I put my name on their list ~1-2 weeks later.

If you really want one, as my Sunnyvale salesman told me, the more color and package choices you put down, the better chance there is of an incoming car meeting your selection. My choices were all package 7 silver, pearl, white in that order. I got a call for white, which was my #3 choice and I was willing to live with it.

 

The phaseout of the tax credit cannot begin before July 01, 2006 (start of Q3).
As long as you take possession of the Prius before then and are otherwise eligble (The tax credit will not reduce your tax liability below your AMT.), you should be eligible for the full credit.

 

Emigrant direct is now offering 4.25%, and we've had a good experience with them so far.