vader1

Ok so I don't want to say too much because I have not won a car, nor do I wish to throw crap at any sponsor of a certain contest.

I clicked on a link some time ago and got a call from a that I was picked as one of around 10 people to show up at this dealership very soon, get a key, and if the key starts the vehicle, guess what, you won a car. It is not a scam, it is a real contest.

The odds are small but not in my favor so I am not counting any chickens. It is also a car not really in my wheelhouse (although it is a very nice little car) nor is it one likely to make a ton of cash if resold. I will not mention the kind of car, again, because I don't want to bash anyone as a part of the contest. I think it is great they wish to gain a little pub by giving away a car.

My sincere hope is that whomever in the finalists that NEEDS a break the most in the world wins the car. I have it pretty good, so it will be fun to go, give it a shot and take part, but if it does not start, I don't care that much even though the idea of actually winning something bigger than a pair of movie tickets is kind of cool.

The winner has to pay sales taxes, delivery charge (probably $700), and license fees. As well as pay income tax on the car. In my bracket I think we are talking probably around $11,000 on a car if you really wanted to make a quick sale you could list for $15-16k brand new. It is a cloth seat AWD CUV without too many toys and it is not a the top seller. But it is a cute little car.

If you actually won this would you:

a) take the risk, make the payments and try to flip the car and make a few grand. (even though there is a chance you'd be stuck with it)
b) pay the fees and taxes and drive the car. Use it as a daily for a while and then sell it probably for more than you have into it anyway in a couple years.
c) pay the taxes and fees (a couple thousand at least) and donate the car to a worthy charity. (you lose money but do something nice)
d) pay the fees and use it as a trade in on something I might want to drive (it will not be a huge trade value, likely a few thousand more than the taxes)


I don't know what other options there are but that is the way it appears to me. I kind of don't want to win because I really don't have much use for it even though it looks like a cool little machine. And secondly, I'd rather some lady with a couple of kids who's husband walked out or something wins. I still do think it would be fun to win something big. I mean that is kind of exciting and a story to tell, but it is expensive to win it and I have no huge need for it.

King Tut

How does all that work out to paying $11,000? What tax bracket are in that paying income tax on a $16k car works out to that much?

King Tut

I've got it like this:

Sales Tax (7%) $1120
Delivery Charge $700
Income Tax (20%) $3200

TOTAL $5020

1) Win it
2) Sell it on Autotrader $2k under lowest priced car
3) ?????
4) Profit

NoBottleJustThrottle

Everyone has a different life situation, with a million different variables that could come into play, and thus I think it would be hard to quantify our responses into a 'common opinion'. For example, I'm happy with my daily driver so I would just try to flip the car as quickly as possible. It's unlikely that you'd be stuck with it. Worst case you undercut MSRP by what you're comfortable with. Sure, you spent $700 (sales tax, delivery, and license), but even if you sold the car for $1,000 you'd still come out ahead. But that's not to say that the next guy that posts up could really use a new daily.

If you're feeling charitable I suppose you might be able to just give it away, and benefit from the tax write-off. I'm a newb when it comes to filing taxes (I have a guy that does it for me), so you might need to look into this option a bit more to even see if it's possible.

Bottom line - do whatever you think is best for your situation.

vader1

The car retails for about $23k but you can claim the value for tax purposes at the average transaction price if you document which is about $19k. In my high tax state and other considerations, I will be required to pay around $8k. Sales tax, tabs and other fees might be about $3k.

King Tut

Can you claim residency anywhere else? I think a better solution is to move to Florida if you are in a state with state sales tax and state income tax.

vader1

No. I wish.

I am kicked into the 10% state income tax bracket and my wife is the real breadwinner. She is a corporate VP and her salary puts us up there, even though we don't share.

I put forth our arrangement when we got married, we each pay half of our shared expenses and then keep our respective money to buy what we want with NO VETO authority. I always knew she would do much better than me, but if I can afford a sports car or come home with a motorcycle, she can't say boo. We also have no kids. She makes over double what I do and it all goes for shoes and makeup. I still have it fine because if I want to drop $1,000 on a life sized Darth Vader for the basement, bam, life sized Darth Vader in the basement.

vader1

That's the real rub. I would not mind donating to charity which wipes out the income liability. (and yes, to this point I have won nothing) but according to the rules, I would have to pay the delivery charge on the sticker (a total joke) sales tax and license. It might be as much as $2500 out of my pocket just to donate a new car.

I am saving for my own toy so I really don't want to write a $2500 check right now. If it was a wash I might, but not under that scenario.

CosmosMpower

Easy solution, don't go to the event.

vader1

Yeah kind of what I am thinking but it still sounds like fun to take the crack at it. I suppose I could refuse the prize and not sign any paperwork.