[pdw]

I'm striving to own a first-year Pacifica gasoline powered plug-in car. I get that the internal combustion side of the powerplant in this minivan is always available to propell the vehicle whatever state of charge the PHEV battery is in. So how does one go about explaining a business plan for getting this more expensive vehicle, to show how it will achieve enough savings to cover that extra cost ?

It seems the sales departments are not yet equipped to be too helpful with questions, but to order an early model we still need to go to the dealership. I'd imagine it's the dealerships that need to get the ball rolling to create demand for this vehicle if they are as good on savings as some volks say they are.

 

[generaltso]

There's really no way to figure that out since pricing has not been released as of yet.

 

[snorth]

But when has that ever stopped anyone on the Internet? ;-)

We already have a thread here with this speculation:
http://www.pacificaforums.com/forum...m/2690-2017-pacifica-hybrid-trim-pricing.html

The popular speculation right now is that they will only offer the hybrid in the Touring-L Plus and Limited trims (the top two tiers), and even then some other features normally found in those trims will be missing. People think the minimum price will be $40k, which if true, would be disappointing, IMO.

 

[generaltso]

This speculation is based on absolutely nothing. No point in trying to figure out the break-even on buying the hybrid based on speculative numbers that have no basis in reality.

 

[snorth]

Eh, I'd say it's more like educated guesses.

 

[pdw]

A long term Pacifica ownership with high local miles, just thought to crunch some numbers to see it it's wise to get plug-in over regular. My guess is ballpark 10-15G's for the option.

 

[snorth]

A long term Pacifica ownership with high local miles, just thought to crunch some numbers to see it it's wise to get plug-in over regular. My guess is ballpark 10-15G's for the option.

And then subtract $7,500 for the tax credit. :grin2:

How much is gas where you are? How many miles per day do you expect it to be driven, on average? You say high local miles, what does that mean? 100k? 200K? More?

 

[aork]

And then subtract $7,500 for the tax credit. :grin2:

Yep! Just don't expect the credit to be refundable - meaning it can reduce your tax bill to $0 but won't do more than that. If you typically pay $4,000/yr in income tax, the tax credit will only be worth $4,000 to you. From irs.gov/instructions/i8936/ch02.html#d0e227:

Line 23
If you cannot use part of the personal portion of the credit because of the tax liability limit, the unused credit is lost. The unused personal portion of the credit cannot be carried back or forward to other tax years.
​

 

[pdw]

The biggest hurdle right now is so few places to plug-in to keep up the savings. Between the wife and I we'd be able to use up the rebate offer on taxes. (I drive 50K)

In addition, I'm considering using the vehicle to sell power dispensers for it in my area which works together to sell each other. Stations for charging must be readily available to sell people on these vehicles .. and the plug-in vehicle is needed to make use of / sell those units

It's still only interesting if there's hope that it pay's off over time like we're used to from past car purchases. Not so smart at first look if it stays way cheaper to drive with the old style electrics on gas .. but so far it looks right for us to start making use of this innovation, all things considered. I'd rather have the plug-in option and not need it as much as I'd thought ... than to not have it and face a fuel price hike that often happens when we least expect it.

 

[snorth]

I don't understand what you mean by "use up the rebate offer on taxes. (I drive 50k)". Assuming you purchase, not lease, the $7,500 federal tax credit is not included in the sale price; you have to file for that with your regular income tax filing. As long as you owe enough in taxes, you can qualify for the entire credit. It doesn't matter how much you drive the vehicle.

The $7500 tax credit (and some states have thousands more of their own credits) lowers the effective price of the hybrid to be competitive, if not cheaper, than the gas version, so there's no real long-term payoff to consider for that comparison.

For powering the vehicle, you can figure out the price point at which gasoline becomes less economical than electricity, but you have to know how much you pay per kWh to your utility. I saw a graphic somewhere that compared the national average for kWh and gasoline costs, and found that when gasoline rose to more than $2.00/gallon that electricity was the more economical option.

 

[snorth]

Yep! Just don't expect the credit to be refundable - meaning it can reduce your tax bill to $0 but won't do more than that. If you typically pay $4,000/yr in income tax, the tax credit will only be worth $4,000 to you. From irs.gov/instructions/i8936/ch02.html#d0e227:

Line 23
If you cannot use part of the personal portion of the credit because of the tax liability limit, the unused credit is lost. The unused personal portion of the credit cannot be carried back or forward to other tax years.
​

I'm assuming that anyone who can afford a $40k+ minivan has more than $7,500 of income tax liability.

 

[generaltso]

The biggest hurdle right now is so few places to plug-in to keep up the savings.

A free ChargePoint station was just installed at my place of employment. I work about 8 miles from home, so I could conceivably just plug it in at work every day and rarely have to pay for fuel. This makes it attractive enough that I'm considering replacing my Cherokee with a PHEV next summer. But could a family really have two Pacificas? :surprise:

 

[toelke]

I'm assuming that anyone who can afford a $40k+ minivan has more than $7,500 of income tax liability.

I think that's often going to be true.
But it isn't something that is necessarily always true.

For Married Filing Jointly $7500 in income tax liability is reached at just $56150 of taxable income. (which means likely > $87K of income because of deductions)

For single it's only $46800 of taxable income (>$57k before standard deduction; possibly much higher if itemizing)

 

[pdw]

We drive 50,000 kilometers. By "use the rebate" ... i meant get back the whole refundable amount.

 

[toelke]

We drive 50,000 kilometers. By "use the rebate" ... i meant get back the whole refundable amount.

Are you Canadian?
Because you say 50,000 km - which makes me think you are.
And if you are, then the $7500 tax credit is probably not applicable to you, since that is a US IRS thing.

 

[PacificaLimited]

For many Americans... myself possibly... it's more than the potential "savings" day-to-day or year-over-year. For many, it's about "Doing the right thing" for whatever their reasons are: Saving the planet, reducing their carbon footprint, reducing our dependency on oil from other countries, reducing our dependency on fossil fuels in-general, less pollution, because it makes them FEEL good, etc. etc. etc.

I think the tax incentives and lure of cheaper cost over time (ignoring initial purchase price) might actually be paired with some OTHER internal moral advantage in choosing a plug-in Hybrid... or quite possibly even just plain ignorance and assumptions. I am willing to bet there are those that THINK they want a plug-in Hybrid because somewhere along the line, they've been led to believe that THAT is what they want/need... without any basis of fact behind it.

I do not own vehicles long-enough to see long-term payoffs like that. They have to be immediate for me, like the tax incentive.

Just my 2-cents.

 

[snorth]

For Married Filing Jointly $7500 in income tax liability is reached at just $56150 of taxable income. (which means likely > $87K of income because of deductions)

For single it's only $46800 of taxable income (>$57k before standard deduction; possibly much higher if itemizing)

I love your number crunching there, but I'm not sure I'm getting your point. It sounds like you're saying that just because you have >$7500 in income tax liability, it doesn't mean you can afford a >$40k minivan.

My point was kind of the reverse, in that if you can truly afford a >$40k minivan, then you're almost guaranteed to qualify for the $7500 tax credit (I could be wrong here). If you don't have enough income liability to qualify, then you should probably be buying a much less expensive vehicle.

 

[snorth]

For many Americans... myself possibly... it's more than the potential "savings" day-to-day or year-over-year. For many, it's about "Doing the right thing" for whatever their reasons are: Saving the planet, reducing their carbon footprint, reducing our dependency on oil from other countries, reducing our dependency on fossil fuels in-general, less pollution, because it makes them FEEL good, etc. etc. etc.

I think the tax incentives and lure of cheaper cost over time (ignoring initial purchase price) might actually be paired with some OTHER internal moral advantage in choosing a plug-in Hybrid... or quite possibly even just plain ignorance and assumptions. I am willing to bet there are those that THINK they want a plug-in Hybrid because somewhere along the line, they've been led to believe that THAT is what they want/need... without any basis of fact behind it.

I do not own vehicles long-enough to see long-term payoffs like that. They have to be immediate for me, like the tax incentive.

Just my 2-cents.

A very good point! I've seen people on the GM Volt forums talk about "supporting the technology" as one of their reasons for purchasing. For me, this will indeed be a factor when choosing between the gasoline or hybrid Pacifica.

I tend to keep vehicles for 10+ years, though. The maintenance costs for the Volt are VERY low.

 

[toelke]

My point was kind of the reverse, in that if you can truly afford a >$40k minivan, then you're almost guaranteed to qualify for the $7500 tax credit (I could be wrong here). If you don't have enough income liability to qualify, then you should probably be buying a much less expensive vehicle.

My point is that you not only could be wrong, you are wrong.
It isn't quite so clear cut as you paint it as to whether someone that doesn't have $7500 in taxes will be able to afford a $40k minivan.

A family with two "average" earners making $48k/year each and with a house with a mortgage could have $96k in income, but less than $7500 in income taxes because they itemize.
Can that family afford it? Probably.
Would they get the full tax benefit? No.


Or look at a retired couple - taxable income is very low, so taxes owed are low as well. Probably taxes on required minimum distribution from retirement accounts, maybe a small pension, and some capital gains from stock sold to pay for the new car. And they have more than sufficient assets that paying for the car is no problem (even with getting very little for the Caravan with 200k miles that it's replacing)
If that retired couple doesn't plan, they'd likely miss out on a lot of the $7500 credit. If they do plan they can probably convert some IRA money to a Roth IRA or otherwise increase their taxable income.
(And I know a retired couple who just bought a Pacifica - obviously not the PHEV, and was probably less than $40k.)

These aren't "out there" scenarios.
It's not like spending $80k on a tesla model X. In that case I think it's very likely they have sufficient taxable income because they're paying a huge premium ($50k more) compared to paying just ~$10k more that it'll be for a Pacifica PHEV.

 

[snorth]

My point is that you not only could be wrong, you are wrong.
It isn't quite so clear cut as you paint it as to whether someone that doesn't have $7500 in taxes will be able to afford a $40k minivan.

A family with two "average" earners making $48k/year each and with a house with a mortgage could have $96k in income, but less than $7500 in income taxes because they itemize.
Can that family afford it? Probably.
Would they get the full tax benefit? No.


Or look at a retired couple - taxable income is very low, so taxes owed are low as well. Probably taxes on required minimum distribution from retirement accounts, maybe a small pension, and some capital gains from stock sold to pay for the new car. And they have more than sufficient assets that paying for the car is no problem (even with getting very little for the Caravan with 200k miles that it's replacing)
If that retired couple doesn't plan, they'd likely miss out on a lot of the $7500 credit. If they do plan they can probably convert some IRA money to a Roth IRA or otherwise increase their taxable income.
(And I know a retired couple who just bought a Pacifica - obviously not the PHEV, and was probably less than $40k.)

These aren't "out there" scenarios.
It's not like spending $80k on a tesla model X. In that case I think it's very likely they have sufficient taxable income because they're paying a huge premium ($50k more) compared to paying just ~$10k more that it'll be for a Pacifica PHEV.

Ok, I'll yield. :wink2: I'm used to spending less than $20k on vehicles, and I know the dent our $33k Volt put in our budget, so I was going on a gut feeling there.