Auto Prices Are Too Damn High Topic!

[akirby]

1 hour ago, jpd80 said:

I think you misunderstand how it works, all buyers have to do is declare that they meet the income limits to qualify for the tax credit

 

This answers the question of when is a tax credit not a tax credit? When it’s an incentive

Nope it’s still a tax credit so you can’t claim more than you owe in taxes.  All this does is allow the dealer to get the money up front based on the buyer saying they’re eligible.  Then you settle up when you file your taxes.  The overhead is that the dealer has to register the sale with the IRS to get paid and the IRS has to track it and handle that in the filing process.

[jpd80]

42 minutes ago, akirby said:

Nope it’s still a tax credit so you can’t claim more than you owe in taxes.  All this does is allow the dealer to get the money up front based on the buyer saying they’re eligible.  Then you settle up when you file your taxes.  The overhead is that the dealer has to register the sale with the IRS to get paid and the IRS has to track it and handle that in the filing process.

If as you say the IRS tracks the sale and the purchaser, they will already know if the buyer’s income

or combined income meets the requirements without any need for returning money.

One thought on give back situation,

Does that tax credit have to be used completely in that tax year or is some or all of able to be carried forward

to successive tax years like the government has done in the past for Ford and GM tax credits?

 

Edited October 7, 2023 by jpd80

[slemke]

28 minutes ago, jpd80 said:

If as you say the IRS tracks the sale and the purchaser, they will already know if the buyer’s income

or combined income meets the requirements without any need for returning money.

One thought on give back situation,

Does that tax credit have to be used completely in that tax year or is some or all of able to be carried forward

to successive tax years like the government has done in the past for Ford and GM tax credits?

 

The IRS doesn’t know because the tax year isn’t over when the purchase is made.  Buy an eligible vehicle in January and neither the current or previous tax year income is known.  It still comes down to filing at the end of the tax year whether you are eligible for the credit or not.  The credit cannot be carried over to another year.

 

Details here: https://www.irs.gov/credits-deductions/credits-for-new-clean-vehicles-purchased-in-2023-or-after

 

The thought is getting the money upfront will lead to additional sales as consumers don’t need to pay or finance the full amount and get refunded later.  Not sure what prevents someone from attesting they are eligible to get a $7500 loan from the IRS and paying it back when filing or quarterly payments.

[akirby]

48 minutes ago, slemke said:

 Not sure what prevents someone from attesting they are eligible to get a $7500 loan from the IRS and paying it back when filing or quarterly payments.

Absolutely nothing, apparently.  I think they want it that way - whatever it takes to encourage buyers.

[jpd80]

So  a single wage earner on  50,000 has income tax payable at roughly $5,700,

would that person would have to pay back $1,800 of the $7,500 tax credit already claimed?
 

Or would the IRS permit the balance of the tax credit to be used in the next tax year?

 

Obviously, I’m confused about this because wouldn’t there need to be a minimum income limit

to claim the whole $7,500 tax credit…….eg, something $67,000 to qualify?

Edited October 7, 2023 by jpd80

[akirby]

1 hour ago, jpd80 said:

So  a single wage earner on  50,000 has income tax payable at roughly $5,700,

would that person would have to pay back $1,800 of the $7,500 tax credit already claimed?
 

Or would the IRS permit the balance of the tax credit to be used in the next tax year?

 

Obviously, I’m confused about this because wouldn’t there need to be a minimum income limit

to claim the whole $7,500 tax credit…….eg, something $67,000 to qualify?

Yes you have to pay it back.  No you can’t roll it over.

Edited October 7, 2023 by akirby

[Harley Lover]

15 hours ago, jpd80 said:

A good jobs growth report for September (335k?) and unemployment still under 4% are all good signs.

 

Good signs for what? Certainly not for lowering interest rates, this news is exactly the opposite of good news. The purpose of the Fed raising interest rates is to slow economic growth. The 2 statistics you cite indicate a lack of slowing, which in turn will most likely encourage the Fed to continue with the interest rate increases. 

[jpd80]

7 hours ago, Harley Lover said:

 

Good signs for what? Certainly not for lowering interest rates, this news is exactly the opposite of good news. The purpose of the Fed raising interest rates is to slow economic growth. The 2 statistics you cite indicate a lack of slowing, which in turn will most likely encourage the Fed to continue with the interest rate increases. 

That’s the rub, economic growth was never the problem, rising prices were and still are. The good news that the current inflation rate has fallen from the highs of a year ago but yeah, still stuck around 3.7%. Keep in mind that’s better than other parts of the world where it’s still above 5% or 6%

Edited October 7, 2023 by jpd80
Context

[Rangers09]

8 hours ago, Harley Lover said:

 

Good signs for what? Certainly not for lowering interest rates, this news is exactly the opposite of good news. The purpose of the Fed raising interest rates is to slow economic growth. The 2 statistics you cite indicate a lack of slowing, which in turn will most likely encourage the Fed to continue with the interest rate increases. 

 

Not everyone is hoping for interest rates to reduce again to the recent historic lows. I am actually happy with the recent increases, which are still very low compared to the 21% we experienced. With inflation reducing gradually and the economy ticking along nicely, all in all a good balance, at least in my opinion.

[jpd80]

3 hours ago, Rangers09 said:

Not everyone is hoping for interest rates to reduce again to the recent historic lows. 

With respect, they could be eased a little to keep the economy from sinking too low.
 

3 hours ago, Rangers09 said:

 I am actually happy with the recent increases, which are still very low compared to the 21% we experienced. With inflation reducing gradually and the economy ticking along nicely, all in all a good balance, at least in my opinion.

The whole point of interest rate increases was to slow the economy but I have a hunch that the bankers are

being looked after by the Fed, it seems both  business and bankers need  to “wet their beaks” at the expense

of people on the end of the chain who pay higher prices and higher borrowing costs.(well, Duh)

 

The point being that after a few lean years, some of the more prominent multinationals and banks

obviously think they are owed something and it’s time to recover losses from the pandemic years

and super low interest rate periods. You only have to look at who is getting fat with profits…..

Edited October 8, 2023 by jpd80

[rperez817]

Data from Cox Automotive at the end of August 2023.

 

 

[Rick73]

11 hours ago, rperez817 said:

Data from Cox Automotive at the end of August 2023.

Adjusted for inflation since 2012, that makes latest vehicles about 20% more expensive.  Is that about right?

 

Rough estimate suggest they should be around $40k, not $48k.

[SoonerLS]

On 10/6/2023 at 2:26 PM, DeluxeStang said:

My parents paid under 400k for their 7 bedroom home just outside of Salt Lake City a decade ago.

What has been will be again, what has been done will be done again; there is nothing new under the sun.

-- Ecclesiastes 1:9

 

The 1600-ish sqft house my parents bought new in 1973 cost $30K. When they sold it in 1990, it went for $100K. Today its estimated value is $206K. The only thing new in this inflation is that 20-somethings haven't been around long enough to see it, so they think it's new (which is pretty much universally true of 20-somethings throughout history).

[SoonerLS]

On 10/6/2023 at 2:44 PM, akirby said:

Too many people today want all the best stuff right away which isn’t realistic.

Too many think they should have the same things they grew up having, not realizing that what they had wasn't where their parents started, but was the end result of years, or even decades, of hard work.

[GearheadGrrrl]

Workers lost the bargaining power they had from the 1940s through the 1960s.

 

Dad was born in '21. mom in '27, me in '50, little brothers in '57 and '59. Dad got a job at the VA after serving in WW2 and mom worked in retail until I came around. They bought a new house in '54 and traded up to a bigger one in '57 with a big addition in '59. Dad got a better job in sales in '52 and bought a new Ford, got a better sales job with a new company car every couple years until he retired in the 80s. Bought a trailer towing spec LTD followed by an E350 diesel, E150 gasser when they parked the trailer on a leased lot in Florida, Taurus gasser, and Mopar minivan- all cash deals. Dad passed in 2001 and mom in 2008. leaving us the trailer, lot and about $200K.

 

Graduated high school in '68 and had three job offers to choose from next day. Went to college in the fall and by the mid 70s the jobs weren't as easy to find and by the 80s the layoffs became frequent. Finally got enough seniority to get year round work then but my younger brothers entered the workforce in these challenging times and didn't have it as easy. Bought my 1st house at age 34 but it was really a share in a co-op apartment complex and 1st new car at 28, not quite keeping up with my parents. Inherited grandma's old house in '86 and finally bought a decent 20 year old house in 2010 for only $40K because it was in a tiny failing town. One younger brother bought mom and dads house but had to sell it and a couple more houses after work moved him around the country, he's retiring now and still making payments. Other brother bought a house, lost it, after renting bought another house and has 17 years of payments left at age 66.

 

My brothers and their wives have provided me nieces and nephews to spoil, all in the 20s, still living at home, and driving 10-20 year old cars. Their economic reality is low wage jobs that will probably never allow them new cars and their own homes. For Ford and the rest of the big 2 and half they'll probably never be customers, even if their earnings increase they'll be shopping $20K cars not $50K and up F150s and Silverados.

 

This is why Ford needs affordable cars and waiting a year for a $25K Maverick ain't gonna cut it.

[Rick73]

53 minutes ago, GearheadGrrrl said:

My brothers and their wives have provided me nieces and nephews to spoil, all in the 20s, still living at home, and driving 10-20 year old cars. Their economic reality is low wage jobs that will probably never allow them new cars and their own homes. For Ford and the rest of the big 2 and half they'll probably never be customers, even if their earnings increase they'll be shopping $20K cars not $50K and up F150s and Silverados.

 

This is why Ford needs affordable cars and waiting a year for a $25K Maverick ain't gonna cut it.

Is it your nieces and nephews, or is society changing like never before?  A major concern of mine is that a larger percentage of population seems satisfied with living a much simpler life that requires much less hard work.  And I don’t count creating entertaining videos to post on internet.

 

When some workers choose to just get by, I’m not sure manufacturers can make new cars cheap enough for them.  And to be clear, I’m not saying this applies to  your family, or that everyone stuck in low-paying jobs is by choice.

 

[GearheadGrrrl]

If they're able, they're working as hard or harder than my generation ever did. I say "if they're able" because two have Autism diagnosis, one after being held back by the sheltered sweatshops went to tech college and is now a cabinet maker, the other has been unable to work. Problem is, work doesn't pay like it used to and the price of almost everything has skyrocketed.

[DeluxeStang]

18 hours ago, SoonerLS said:

Too many think they should have the same things they grew up having, not realizing that what they had wasn't where their parents started, but was the end result of years, or even decades, of hard work.

Well, some young people yes, and that's a problem. But me personally, I have zero desire to own a home like the ones my parents have, it would be far too much for me. I'm perfectly content with a 1,500-2,000 sq ft house, something small enough to be manageable, but big enough so I have space for family and friends to visit, and so it doesn't feel like the walls are constantly closing in. 

 

You do have an issue with a lot of young people buying 4,000 sq ft homes with all the latest tech features, and then wondering why it's expensive, but that's not really me. 

[GearheadGrrrl]

Agreed, mom and dad's last house was barely 1000 square feet and was plenty roomy. I've got 1200 square feet plus a 600 square foot attached garage and it's more than big enough- In the winter I close off half the house and heat and comfortably live in 600 square feet. Same with cars- didn't have air conditioning and an automatic 'til 1998 and had only one 4WD/AWD vehicle in my life. Still ticked off that the manufacturers stick me with a bunch of unreliable gadgets I never requested!

[ANTAUS]

I serve on the board of directors of an organization that provides homes at cost, for people in need. (Not saying the name but I think most will get it).  We open our grant period, and during discovery, the finance committee learns quite a bit which they share with us.  Out of 100 people who apply, maybe 2 qualify.  When going through their finances, we see all these unnecessary expenses.  Gym membership, cheese of the month, cell phone for kids under 12, massage packages, Pandora Music Streaming, oh Spotify, and XM Radio  Etc. Etc.   As I've said before, Americans are great consumers, but when it comes to learning about policies that affect their every day, they are stupid and uneducated and will vote against their own self-interests.

 

Having said that, I'll admit I was raised with a Silver Spoon in my mouth and still live it, so with caution, I will ask and say "If you can't afford it, why do it" with a touch of " having a license is a privilege, not a right...owning a vehicle is an honor, not a necessity" So if vehicles prices are too high, (you obviously have buyers that CAN afford it, which is why prices keep creeping up), then maybe a used vehicle might be the better way?

[fuzzymoomoo]

39 minutes ago, ANTAUS said:

then maybe a used vehicle might be the better way?

pre- covid, maybe but as ridiculous as the used car market is right now if you’re looking at it in terms of monthly payment as most buyers do, it’s a wash. You’re almost better off putting two or three grand down on a lease for the lower payment in a lot of cases.  

Edited October 10, 2023 by fuzzymoomoo

[HotRunrGuy]

4 hours ago, ANTAUS said:

I serve on the board of directors of an organization that provides homes at cost, for people in need. (Not saying the name but I think most will get it). 

 

 

It's been a while, but I used to be proud to be able to provide my talent and "swing a hammer" for that organization, until I realized they were more interested in a financial contribution than a physical one.

 

HRG

Edited October 10, 2023 by HotRunrGuy

[balthisar]

12 hours ago, DeluxeStang said:

I'm perfectly content with a 1,500-2,000 sq ft house, something small enough to be manageable, but big enough so I have space for family and friends to visit, and so it doesn't feel like the walls are constantly closing in.

 

That's still an historically large house, though. Here's an actual Census report that's fascinating because it goes beyond merely home size.

 

Here in SE Michigan, there are shitloads of houses under $200,000, and, no, they're not all in Detroit. Most of them aren't in Detroit. But they're also not in the "cool" places  like Royal Oak that everyone thinks that they must live in to feel content. They hear someone make fun of "Westland" by calling it "Wasteland" and now it's not on anyone's list for consideration, even though it's a perfectly fine, non-failing city.

 

My first house was smaller than my parents' house. It was in a slightly worse postal code. I was making less money. I was 25 or so years behind them, so why should I have expected to have the same stuff? I certainly didn't expect to live in a million dollar condo in downtown Birmingham on my first salary directly out of the Army.

Edited October 10, 2023 by balthisar

[fuzzymoomoo]

18 minutes ago, balthisar said:

 

That's still an historically large house, though. Here's an actual Census report that's fascinating because it goes beyond merely home size.

 

Here in SE Michigan, there are shitloads of houses under $200,000, and, no, they're not all in Detroit. Most of them aren't in Detroit. But they're also not in the "cool" places  like Royal Oak that everyone thinks that they must live in to feel content. They hear someone make fun of "Westland" by calling it "Wasteland" and now it's not on anyone's list for consideration, even though it's a perfectly fine, non-failing city.

 

My first house was smaller than my parents' house. It was in a slightly worse postal code. I was making less money. I was 25 or so years behind them, so why should I have expected to have the same stuff? I certainly didn't expect to live in a million dollar condo in downtown Birmingham on my first salary directly out of the Army.

Im downriver. I bought my house in fall 2016 for $138k. It will appraise somewhere around $220k today and I have a lot of upgrades to make to the kitchen and bathrooms which will only drive that number higher. It’s only a 1,200 sq/ft ranch. 

[silvrsvt]

12 hours ago, DeluxeStang said:

You do have an issue with a lot of young people buying 4,000 sq ft homes with all the latest tech features, and then wondering why it's expensive, but that's not really me. 

 

Much of this has to do with location or options you want in a house. 

 

In my area, where space is at a premium due to lack of it and insane property value/taxes, new housing that is the size your talking about starts at $800k. A house that is about 2000 sq ft is in the 500-600K range and "affordable" housing is a sub 1200 sq ft house that is 300K. I see retirement housing that is in the 4000ft sq range-I'm guessing because adult kids are still living with their parents.

 

My parents bought a retirement house 20+ years ago that was new construction that was bigger then the house I grew up in (about 1000 sq ft that is now worth about 300-400K according to zillow) by 800 sq ft....