Wait for $7,500 instant rebate?

[MrEnergyCzar]

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

[misslexi]

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.

[Noel Park]

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.

[misslexi]

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

[George S. Bower]

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

[dannyrrr]

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!!!

[misslexi]

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%

[maynard]

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.