My Volt is due to come in by year end (July 1st). Should I wait to see if they pass the proposal to give the $7,500 tax credit as an instant payout for anyone picking up a Volt despite their tax status?

Thanks
MrEnergyCzar

If you forgo the instant $7500, claim it on your 2011 tax return, and file on January 2, 2012, you would have lost roughly $110 in potential earned interest at 5% for the 6 months. If you wait until April 16, 2012 to file you would have lost roughly $180 in earned interest. Both numbers are nominal, not including tax on the interest, changing rates etc. It would probably be a wash if you have to borrow the $7500 now to get it back later.

Unless you are already riding a bicycle to work the gas savings alone will swamp the equation.

I say buy it without waiting for the early money.

misslexi,

Amen. Plus, there is no guarantee the the "early money" is ever going to materialize anyway. It's just political discussion at this point.

If I could buy a Volt this year (n/a Seattle), I'd borrow the $7.5k on a 0% credit card, pay the 4% fee. Then once I got the $7.5k back on taxes I'd pay off the card. This way the borrowed money doesn't stay a part of the car payment forever.

I've hatched quite an array of financing plans, now if I could only execute :)

Peter,
I don't know if you pay quarterly estimated tax like I do or not, but if you do then you can start factoring in the 7500$ at the end of Q1. If you are employed maybe you could have your employer withhold less from each paycheck. Sooo--don't wait.
GSB

If you forgo the instant $7500, claim it on your 2011 tax return, and file on January 2, 2012, you would have lost roughly $110 in potential earned interest at 5% for the 6 months. If you wait until April 16, 2012 to file you would have lost roughly $180 in earned interest. Both numbers are nominal, not including tax on the interest, changing rates etc. It would probably be a wash if you have to borrow the $7500 now to get it back later.

Unless you are already riding a bicycle to work the gas savings alone will swamp the equation.

I say buy it without waiting for the early money.

please let me know where you are earning 5% interest...I want in on that!!!

please let me know where you are earning 5% interest...I want in on that!!!

Consider some solid, dvidend paying common stock. Below are a few examples showing current yields. As always, reward carries risk.

Glaxo SmithKline, 6.3%
Merck, 4.3%
AT&T, 6%
NuStar Energy, 6.1%
Exelon, 5.1%
Pinnacle West, 5%
Washington REIT, 5.6%
Progress Energy, 5.4%
Verizon, 5.3%

You don't have to wait for your tax return. If you are paying cash for your Volt, Ally,(GMs finance arm), will give you a "single payment loan" for $7,500. This loan is due June 8th. 2012 and charges no intrest or fees. We have that loan for our new Volt. I really had to scratch my bald head on this one, but I truly believe it is as free as money ever gets. They probably will charge a ton if you go past the due date. You can't get this "free" loan if you are financing the car because you can't have two loans on the same vehicle.