My son entered a contest & has won the HS 250h. http://images.ibsrv.net/ibsrv/res/sr...ilies/woot.gif
So he is planning on picking it up this week.
Background
He is 22
Excellent stable job
Would use the car driving to and from work
We live in a suburb of Atlanta and he works in midtown, will probably move to midtown this summer.
He is now driving a 2000 Suburban that is ours.
We also have a 1998 Camry (which was his originally)
We can sell both of those cars so insurance may be a wash or close to it.
He can be on our insurance..so that would be an increase of about 500 per year.
IF he was on his own insurance, 3200/year
Would pay about 9,000 tax. Could use the money from the sales of the cars toward t his bill.
http://images.ibsrv.net/ibsrv/res/sr...milies/pat.gif
I think it is a no brainer...who wins a friggin car? It is unbelievable. BUT I have been on the internet for over 2 hours, and the differences in opinion on this model is driving me crazy.
BTW, my son is neither a "greenie" nor a "I don't care about the environment". He is also not a "crazy about cars" type either. He does like the finer things in life though and is working very hard at his job to further his career.


What would you guys do, knowing what you know from being owners of this car.

Thanx in advance for any help you can offer.http://images.ibsrv.net/ibsrv/res/sr...lies/smile.gif

 

Congratulations - that's not my favorite model but for $9,000 I'd take it, sell a couple of cars and be happy. You might even be able to make a deal with the local Lexus dealer if you want another model.

Dave Mac

 

Wow! That's amazing.

I sure hope he genuinely 'won it', and not 'got a free lease for 3 years, and has to pay for the remaining 2 years' type of deal.

 

Well, I know we are extremely excited.
We love LEXUS, we have an ES350, which my hubby drives. I prefer a tighter steering, sportier feel to a car, and from the reviews I have read about the steering, it seems that the 250H has a less sensitive steering.
I am not sure though that it is the right car for a 22 year old guy. I may take your advise and go to our Lexus dealer and tell him in advance about the car and see what he may suggest. But if we trade it, won't we have to pay tax twice?
Marlene

 

that's awesome! It sounds like your son deserves this for all his hard work. This is a once in a lifetime opportunity IMO and I say let him enjoy it

 

He'll love the gas mileage, especially compared to a big suv. The only negative I'd say is that the HS for a 22 y.o. male is not particularly a chick magnet .

 

dang 9 thousand is a lot of tax. Essentially, you are buying at 35K car for 9K and are "trading" it in for another. So you are going to take a small hit, but you might buy a car you actually like, perhaps an IS which is in that price range since you already have an ES350.

that said, I think you should keep the HS. The dealer is not going to want to take the HS back bc they arent exactly flying off the lots (in fact the opposite). The dealer will not give you a good price for the HS because they will be stuck with it for a while.

 

^^ something to consider for sure.

I say keep it for a few years, and then sell it. The dealer would very much lowball you. There's a reason the 'give away' was an HS250H instead of, say an IS250...

 

Congrats! As for the HS being a chick magnet, well it depends what type of chick :-) If he likes girls that listen to country music and drive pickups, or rock-n-roll gals that drive Camaros, well, the HS isn't a good choice. But I drive mine through a liberal arts college campus on my way home every day, and get plenty of turned heads (more than in my Saab).

Besides, what other car can he buy for $9000 that would be a better chick magnet?

 

"But if we trade it, won't we have to pay tax twice?"

No, you won't pay the tax twice. Actually the $9,000 is only an estimate of the income tax on the car and it could be much lower - maybe closer to $5,400 - or I guess even higher. The value of the car is just added to your other income when you file your 2010 tax return next year. You will have to check with your tax return preparer.

I like the idea of trading it with the dealer before you even pick it up providing the dealer treats you reasonably fairly. In any case you will pay what amount to an estimated tax payment when you pick up the prize car and when you trade it there will be no further income tax plus you should have a much smaller sales tax on the car you get through the trade which is a good deal for you. In fact if the dealer gives you less than the prize amount on the trade (which is quite likely) it should actually reduce the amount of income tax on the orginal car. Again you are going to need to see an accountant on this but it will be worth it.

And a final note - I often see local charities offer a cash prize in lieu of the car in situations like this. The taxes are about the same but you then might decide to use the cash for whatever is needed and deprive your son of the new car.

Dave Mac

 

Congratulations!

Take the car, pay the dues, and enjoy!!!

 

A few other thoughts on whether an HS is right for a 22 year-old:

- there's no hatch, and no folding seats, so utility is marginal. No place to mount a hitch and no factory roof rack either. If he's active outdoors, or needs to haul gear, this is not a good choice.

- It is a nice car, comfortable, upscale looking, cruises well on highways, with nice amenities. Driving dynamics are pretty good for a Lexus, but acceleration is tepid.

- Lexus maintenance is expensive, as you know, as is insurance on a $38K car. Gas savings will counter this somewhat.

- Let him decide if he likes the car before accepting it - if he doesn't, IMO it will be real difficult to sell or trade in later. Better to take the hit now and swap for an IS250 or cash (or maybe a used car on the dealer's lot if he wants a hatchback or truck or 2 door coupe or whatever), even if it doesn't look like a good deal now.

- I'm not a CPA, but my understanding of taxation on prizes is they report the value of what you take delivery of, not what you "won". So you should only get taxed on that $33,000 IS250 or $30,000 cash or whatever, even though the HS250 prize value is $38,000.

 

congrats to the lucky winner....

 

Non-enthusiast chicks will dig the comfortable appointments. Congratulations to you and your son! Whether it's the perfect car for his lifestyle right now isn't really top priority since you aren't paying MSRP for it.

Best of luck to your son in his career! Sounds like he deserves a nice ride.

 

not unless the HS was souped up with a kit, lowered, and aftermarket wheels


to OP: congrats on the new car!