Newsletter - January 2006

IS IT TIME TO BUY A HYBRID?

If you have been thinking about buying a hybrid, now may be a good time to put those plans into action. Beginning January 1, 2006 a federal tax credit became available, replacing the previous $2000 tax deduction. According to the Wall Street Journal and the American Council for an Energy-Efficient Economy the estimated credits will range from $3150 on a 2006 Prius down to $650 on a Silverado 4wd. At least two factors limit the applicability of the federal tax credit. One is if you are subject to the alternative minimum tax you are not eligible for the federal tax credit. Secondly the credit begins to phase out after 60,000 sales of each model. When 60,000 units have been sold the full credit remains for that quarter and the next. Then it drops to 50% of the original amount for 2 quarters, 25% for 2 quarters after that it is gone.

Colorado also has a tax credit for hybrids. The amount is figured as a percentage of the difference in price between the hybrid and the comparable conventional model. The percentage varies depending on if the vehicle is rated as a Low-emitting vehicle (LEV) or an Ultra-low-emitting vehicle (ULEV). Mild hybrids like Silverado, Sierra and Dodge Ram do not qualify. The Colorado tax credits begin to decline for vehicles purchased after July 1, 2006. Click here to see details on the Colorado dept of revenue website.

Tax credits are time sensitive and you should seek your tax advisor’s advice before making a decision. Some vehicles have a wait list. Prius is about 6 weeks.

Other factors to consider are warranty, repairability, type of driving you do and resale value. For example the warranty on the Prius is: basic 3 year 36,000 miles, power train 5 year 60,000 miles and hybrid components 8 year 100,000 miles according to Toyota’s website. Warranties on the Honda Accord and Civic Hybrid is 5 year 60,000 miles and only transferable if the car is resold by a dealer according to their website. The hybrid batteries are estimated to cost around $3000 to replace and will wear out at some point. Hybrids haven’t been on the road long enough to assess reliability but they do have about 40% more parts than a conventional vehicle. If you do mostly highway driving you won’t realize much if any gas savings. Hybrids get the best mileage around the city because braking recharges the batteries. Mountain driving will produce better mileage because of braking on the down slope. So far according to NADA figures the hybrids are holding value better than their conventional counterparts, but some have only been out a couple of years.

Here are some examples of estimated tax credits and gas savings* on selected models.

Yearly gas

Hybrids Fed Credit State Credit Savings

Prius $3150 $3285 $380

Civic 2100 2531 329

Lexus 2200 3443 692 Silverado 650 0 241

*Based on 15,000 mi/yr, combined city highway and gas price of $2.33/gal.

THE OTHER DRIVER GOT THE TICKET.... WHY DOES MY INSURANCE HAVE TO PAY THE CLAIM?

The accident was the other drivers fault, right? The officer issued the other driver the ticket. You begin the process of making a claim with the other driver’s insurance company. You receive a return call from the other driver’s insurance company asking for a taped deposition. Finally the other driver’s insurance company calls you back to inform you that they aren’t accepting liability! Wait a minute......you assumed it was a slam dunk!

At this point you have two choices, take the other driver's insurance carrier to small claims or county court or place a claim with your insurance and pay your deductible, then ask your insurance to subrogate (go after the driver’s insurance carrier for the damages). In the mean time your car looks awful or is bordering on being unsafe to drive.

Here’s the reality, the other guy receiving the ticket isn't necessarily going to prove your case. Unless the officer witnessed the accident their citation is based upon the officer’s opinion of what happened. Don’t count on the other driver receiving the ticket to keep your insurance company out of the loop.

Subrogation is tricky. You may ask your insurance company to subrogate the claim but it’s up to your carrier if they will pursue subrogation. On the practical side the loss may not be great enough for your insurance company to pursue it. Also if the damages are less than your deductible your insurance company can’t pursue the claim on your behalf because they have no subrogated interest.

AFTER AN ACCIDENT

* If you feel it will help your case FIND AN INDEPENDENT WITNESS. The independent witness's version will carry more credibilty than the driver and or passenger(s).
* If at all possible DON’T MOVE YOUR VEHICLE.
* Have a camera in your glove box TAKE PICTURES AT EVERY ANGLE.

Put together an accident documentation kit and keep it in your glove box. If you want to find out what you need in the kit, email info@addisonauto.com to request the suggested items.

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Addison Auto Repair & Body Shop
2005 South Holly Street • Denver, CO 80222 • 303-691-9484

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Serving Virginia Village, Holly Hills, Southmoor, Cherry Hills Village, Greenwood Village, University Park, University Hills, Belcaro, Hilltop, Cherry Creek, Washington Park, Bonnie Brae, Southmoor Park and greater SE Denver area since l982.

We work (mechanical repair and auto body work and hail damage) on all makes of cars and trucks, including: Chevy, Dodge, Ford, Honda, Jeep, Kia, Lexus, Nissan, Plymouth, Saab, Subaru, Suzuki, Toyota and Acura through Volvo.