Comment Re:Two Crucial Technologies (Score 1) 1615
Okay, you win. Or DO you...?
A Section 179 deduction is a one-time deal, representing a "savings" for you, in this case, of $9,000.
Suppose, in your favor, that gas averages at $2.00 per gallon over the next five years.
Let's assume that you keep your truck for 5 years, and that you drive it 20,000 mi/year, which isn't unreasonable.
So, 5 years * 20,000 miles = 100,000 miles.
At 15 miles per gallon, that's (100,000mi / 15mpg) = 6,667 gallons of gasoline.
Thus, $2.00/gal * 6,667 gal = $13,333 <-- FUEL COSTS
Your costs over 5 years, with the one-time Section 179 deduction, is $13,333 - $9,000 = $4,333.
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Now, if you bought a Hybrid, at 50 miles per gallon, under the same conditions (20K miles/yr):
Fuel Consumption: (100,000mi / 50mpg) = 2,000 gallons.
Fuel Costs: 2,000gal * $2.00/gal = $4,000.
Now, this past year you could have taken a one-time $2,000 tax deduction for purchasing a Hybrid, synonymous with Section 179. (will be $1,500 in 2004. Also, electric cars had a $4,000 deduction).
Your costs over 5 years, with the Clean-Fuel deduction, is $4,000 - $2,000 = $2,000.
That's less than half of the cost of the F150 ($2,333 in your pocket.)
Not to mention, you may save a couple thousand dollars (over the F150) on the hybrid itself!
We know gas prices are on the climb. Consider what would happen if gasoline averaged $2.30 over the next five years:
$15,333 - $9,000 = $6,333. <-- Your costs
(Section 179, being "one-time", can't account for increasing gasoline prices)
You get the picture.
A Section 179 deduction is a one-time deal, representing a "savings" for you, in this case, of $9,000.
Suppose, in your favor, that gas averages at $2.00 per gallon over the next five years.
Let's assume that you keep your truck for 5 years, and that you drive it 20,000 mi/year, which isn't unreasonable.
So, 5 years * 20,000 miles = 100,000 miles.
At 15 miles per gallon, that's (100,000mi / 15mpg) = 6,667 gallons of gasoline.
Thus, $2.00/gal * 6,667 gal = $13,333 <-- FUEL COSTS
Your costs over 5 years, with the one-time Section 179 deduction, is $13,333 - $9,000 = $4,333.
-----
Now, if you bought a Hybrid, at 50 miles per gallon, under the same conditions (20K miles/yr):
Fuel Consumption: (100,000mi / 50mpg) = 2,000 gallons.
Fuel Costs: 2,000gal * $2.00/gal = $4,000.
Now, this past year you could have taken a one-time $2,000 tax deduction for purchasing a Hybrid, synonymous with Section 179. (will be $1,500 in 2004. Also, electric cars had a $4,000 deduction).
Your costs over 5 years, with the Clean-Fuel deduction, is $4,000 - $2,000 = $2,000.
That's less than half of the cost of the F150 ($2,333 in your pocket.)
Not to mention, you may save a couple thousand dollars (over the F150) on the hybrid itself!
We know gas prices are on the climb. Consider what would happen if gasoline averaged $2.30 over the next five years:
$15,333 - $9,000 = $6,333. <-- Your costs
(Section 179, being "one-time", can't account for increasing gasoline prices)
You get the picture.
