Last post on Mar 24, 2013 at 12:44 AM
You are in the Lexus RX 400h
What is this discussion about?
Lexus RX 400h, Lexus, Hybrid Cars
#23 of 2363 is it really a 4k premium if you get a 1.5k tax benefit?
Feb 11, 2004 (9:17 am)
The federal government provides a tax credit for qualifying electric vehicles (electric only with four or more wheels) of 10 percent of the cost of a qualifying electric vehicle. Hybrid vehicles do not qualify for the qualified electric vehicle tax credit. The tax credit for qualifying electric vehicles is a dollar-for-dollar credit against federal taxes owed.
"Clean-Fuel Vehicle"(HYBRID) Adjustment to Gross Income
If you purchase a hybrid electric vehicle (gasoline-electricity) or another qualifying alternative fuel, you likely qualify for a "clean-fuel vehicle" adjustment to gross income. Qualifying alternative fuel vehicles use biodiesel, compressed natural gas (CNG), ethanol, liquified natural gas (LNG), methanol, liquefied petroleum gas (LPG or propane), dedicated (100 percent) electric, hythane or hydrogen.
Internal Revenue Service (IRS) instructions show that electric hybrids (Toyota Prius™, Honda Insight™ or Honda Civic™ Hybrid) qualify as "clean-fuel vehicles." Vehicles bought in 2001, 2002, or 2003 are eligible for an adjustment to gross income of $2,000. The deduction amount decreases by $500 each year following until it is phased out. IRS publication 535, "Business Expenses," (page 48-50) details this deduction. Chapter 12 states that you may claim this "clean-fuel vehicle" income adjustment even if it is not used in a trade or business.
As an individual, you claim this deduction by placing $2,000 (or appropriate deduction amount) on line 34 of your federal 1040 tax filing form. To qualify, you must indicate "clean-fuel" on the dotted line to the left of any deduction cost entry you place on line 34 of the 1040 form. Keep in mind that line 34 is the sum of adjustments to the Adjusted Gross Income line so you must add the "clean-fuel vehicle" amount to any other adjustments to gross income you have for the sum amount to be correct. This adjustment may be claimed on your tax filing for the year in which you purchase the vehicle. You may have to amend back taxes to claim this adjustment. Consult your accountant / tax preparer.
#24 of 2363 "Tax Benefit" is not the deduction.
Feb 11, 2004 (12:24 pm)
If the deduction ($2,000) is an adjustment to your Adjusted Gross Income then the adjustment itself is NOT the savings.
I just worked up a scenario with a (pre deduction) AGI of $50,000. After the $2k adjustment was used, taking the AGI to $48,000 the tax liability only changed $300.
For those people who are weighing the extra cost, $300 isn't all that much.
Jees, that reminded me of a client I had who wanted to mortgage his house because he wanted to save on his taxes. I had to explain and explain to him that he wasn't going to SAVE money doing that!
#25 of 2363 Other possible benefits of hybrids
Feb 11, 2004 (6:18 pm)
Some states allow hybrids in commuter lanes.
Out here in CA (where hybrids aren't allowed on commuter lanes), we have smog test every two years. With the lower emissions, are hybrids likely to pass the smog tests for a longer period of time?
Or maybe CA, which is big on reducing emissions, should exempt hybrids or require smog tests every 3 or 4 years instead of every two.
#26 of 2363 $4K premium
Feb 11, 2004 (7:24 pm)
My good friend is a Lexus fleet manager and I got the $4K premium from him. I agree with mfullmer, the $2000 is only a deduction, not a true cost reduction and is only good this year. In 2005 it drops to $1500. I don't live in an area with much traffic congestion and the fast start heater here in Florida is of limited value. My 2001 RX has more than enough up front space/legroom and the new 330 that I test drove is even better. The Smart Entry is on other cars that aren't hybrids so it isn't an exclusive feature. I do like the idea of the quietness, smooth ECT transmission, but question the cost /benefit if there isn't a substantial increase in gas mileage.I have touch screen climate control on my GS300 and like it, but the my RX with Nav is more than adequate.
#27 of 2363 Re: Other possible benefits of hybrids
Feb 11, 2004 (7:48 pm)
I forgot to mention about the emission. In my opinion, USA will be slow to catch up with Europe and Japan as long as Bush administration is in power. Prius can pass European emission standard scheduled for 2012. To go before, 8 years ahead.
Another thing I forgot to mention is the hybrid reliability. Overall, Hybrid Synergy Drive (HSD) drive train is more complex than traditional Internal Combustion Engine (ICE) drive train due to two power sources. BUT, mechanically, HSD is simpler. The complexity of HSD is moved to electrical and transistor level. Four 32-bit processors manage the energy flows between the ICE and the battery. Load-balancing between two power sources reduces stress on each source by half. Electronic motors and computer processors are generally more reliable than mechanical parts. Therefore, HSD will be more reliable by design.
HSD cars also have better weight distribution. Internal Combustion Engine is in the front and the battery is in the back.
Not all hybrids were created equal. I don't believe mild/parallel hybrid is worth the premium cost for most people right now. Toyota HSD is a full hybrid. It is actually a serial parallel hybrid. It has advantages of both worlds. Toyota can explain better than me about it here. http://www.toyota.co.jp/en/tech/environment/ths2/what.html
As far as I know, we don't know for sure how much extra premium Toyota/Lexus is going to charge for the Hybrid version. But I can tell you the following benefits by design:
Total silent at the stop light. Priceless.
Instantaneous power delivery. Priceless.
V8 power with I4 fuel economy. Priceless.
A decade ahead of emission standard. Priceless.
Feb 11, 2004 (8:05 pm)
> I don't live in an area with much traffic congestion and the fast start heater here in Florida is of limited value.
Points well taken.
> The Smart Entry is on other cars that aren't hybrids so it isn't an exclusive feature.
But we are comparing RX330 and 400h with assumption of $4k difference. BTW, I am only guessing that it will most likely be available for 400h. Maybe your good friend can fill in with which features come with $4k extra.
> I have touch screen climate control on my GS300 and like it, but the my RX with Nav is more than adequate
Comparing RX300 to 400h, wouldn't you rather prefer touch screen climate control and Nav?
#29 of 2363 Hybrids in HOV's - Don't count on it.
Feb 12, 2004 (7:40 am)
I was only able to find one state - Virginia - who currently allows Hybrids to be in the HOV lanes with only one person. Even that is expiring on July 1, 2006 and there has been a big push to NOT extend it past that date.
Even on the National level every attempt to exempt the Hybrid has been shot down.
#30 of 2363 The future of hybrid cars
Feb 12, 2004 (8:10 am)
When we look at the Honda Civic hybrid and Toyota Prius, we can be sure that the $4K premium will be the target price for RX400h when compare with RX330. I am so glad to see the most remarkable features on these hybrid cars like super ultra low emission, quite operation, powerful advanced drivetrain or even car pool lane use.
On the other hand, we should look at the cost to buy and true cost to own for these vehicles. We probably need to do some math to see how many miles we need to drive or how long it will pay for itself. I looked at the Prius discussion. The demand for the '04 Prius is very high. Some dealers are charging over the MSRP. I talked to my Toyota dealer. They told there is a usual 7 to 12 months wait for the Prius.
No wonder the demand is high for the Prius when we look at the gas mileage of 60 mpg and the nearly $1.7+ per gallon of regular. Good thing about these hybrid cars are using regular fuel. I don't know if RX400h needs premium fuel like RX330.
#31 of 2363 re: the future of hybrid cars
Feb 12, 2004 (7:13 pm)
I'm sure there will be a waiting list for the 400h which will justify the premium and a price above MSRP. My wife doens't like buying a new car to begin with although our 2001 RX was bought new because of the Nav. Her 2001 GS was bought from my friend who is a fleet manager(his wife's car)at a substantial discount from what the usual customer would pay. If there is going to be a substantial premium and above MSRP, my wife will opt to keep the 2001 RX and wait for a 400h on the used car market. We still feel that the cost/benefit has to be there. We bought 3 of our 4 Lexus that were used 1 year or less with low mileage.
#32 of 2363 Prius do not get 60mpg
Feb 12, 2004 (11:49 pm)
EPA rating is not how people drive. There was a recent report on Autoweek about this, which is saying that EPA's way of rating fuel consumption is outdated for hybrids. Most consumers get 40~45mpg on survey. In order to get beyond 50mpg, you need to follow a "formula" of driving. (getting up to speed quickly and start cruising, etc..)
Lexus is quoting 30mpg in autoshow. The best you should expect is about 25mpg. Hybrids get better city than highway mpg. 25mpg is pretty good considering most RX owners get 17~20mpg in combined driving.
OK, assuming 7mpg saving for 91+ ($2 in CA). On average 12K drive per year, you save about less than $400 for fuel ($1330 vs $960). You need 10 years to recover the cost. It would be more if you consider $4000's opportunity cost (interest?)
My point is that if people buy hybrids for saving money, they are missing the points. 400h get better response (horse power), which worth $4000 alone for some people. Saving fuel cost is just icing on the cake. Being first in owning one is priceless (as the TV ads says...)
BTW, 400h would only come "fully loaded". That is on top of the $45K loaded RX330. You can expect $50 price tag. For lower-end, they want you to get Highlander hybrids instead.