Excise tax bill?

[wolfgang239]

Originally Posted by Boston_Burbs

I am OK with taxing people for dump financial decisions. No one should finance a car, ever.

Yet you see plenty of idiots who live in trailers with brand new pickup trucks. Heck, the local housing authority boasts a vehicle fleet better than anything I have ever owned.

Yeah that 0% financing deal I got was highway robbery

[Dm84]

Originally Posted by wolfgang239

Yeah that 0% financing deal I got was highway robbery

Even at 2% financing it's worth it if you can invest the money and earn a 4-5% return.

[G-fused]

Originally Posted by Parsec

We have a super low gas tax, so they need to make up for it some other way. The excise tax is unique in that it punishes people who can afford to buy or lease a new car every 3 years and doesn't hurt poor or financially responsible people who drive older cars. You can't say that about a progressive income tax which disproportionately hurts high-income earners and you can't say that about the gas tax or sales tax which disproportionately hurts low-income earners. On the same note, I think a progressive sales tax would be a good idea. If you want to buy non-essential luxury goods then you'll have to pay a higher sales tax. That will allow lawmakers to eliminate the sales tax on low-cost necessities like school supplies.

Well, OK. Makes sense.

I guess I just feel pulverized and abused that so much of the money I earn goes to someone other than me. I'd rather have one big friggin' tax bill instead of feeling nickel and dimed every time I turn around.

[Parsec]

Originally Posted by G-fused

Well, OK. Makes sense.

I guess I just feel pulverized and abused that so much of the money I earn goes to someone other than me. I'd rather have one big friggin' tax bill instead of feeling nickel and dimed every time I turn around.

That requires big government. Think Scandinavia (Denmark, Sweden, Norway). High taxes (over 50% federal income tax), but the government takes care of you so everyone has a high quality of life.

[G-fused]

Originally Posted by Parsec

That requires big government. Think Scandinavia (Denmark, Sweden, Norway). High taxes (over 50% federal income tax), but the government takes care of you so everyone has a high quality of life.

Federal, State, excise, sales, all the cable and phone and other places that we are taxed...I feel like I'm paying at least 50% already.

I'm definitely not advocating for a high tax bill to be taken care of. I am just saying I'd rather pay all of it in one shot - like once a year, rather than being taxed for every transaction. Makes me feel like I'm being abused. I know it's not realistic, I'm just saying that all these taxes on every little thing feels abusive.

[Drkness]

Originally Posted by Boston_Burbs

I am OK with taxing people for dump financial decisions. No one should finance a car, ever.

Yet you see plenty of idiots who live in trailers with brand new pickup trucks. Heck, the local housing authority boasts a vehicle fleet better than anything I have ever owned.

Quite ironic that you fail to spell 'dumb', I'm going to have to disagree just because you're comfortable roaming around in an old gas guzzler doesn't mean i have to be. I've financed previously and have managed to pay the vehicles completely off in an timely manner and wouldn't consider it to be a "dumb financial decision" at all, Not to mention that financing has helped me towards building credit as well as it forces me to be more responsible with my budget which imho is great self-discipline.

It just seems like this state is out to tax everyone who is doing 'alright', Its bad enough the cost of living is already as expensive as it gets in most of the cities i've visited.

[BostonMike7]

Originally Posted by Boston_Burbs

I am OK with taxing people for dump financial decisions. No one should finance a car, ever.

So anyone not driving around in a dumpy old car is making a poor financial decision?


My time is valuable. I don't feel like wrenching on my cars anymore than I need to to save a buck. I'd rather finance a new(er) car at 0-2% interest, keep my money in my pocket, drive the car for 8-10 years until it starts breaking down again and go do it again.

I have no interest in buying 150K mile $5K clunkers and missing out time playing with my kids on the weekend because I need to replace wear-and-tear items. My time is valueable

[Boston_Burbs]

I dont want to derail the thread but I used to hold the same views as you two but then I saw the light!

http://www.mrmoneymustache.com/2011/...-four-or-more/

New Cars and Auto Financing: Stupid, or Sensible?

[Parsec]

Originally Posted by BostonMike7

So anyone not driving around in a dumpy old car is making a poor financial decision?


My time is valuable. I don't feel like wrenching on my cars anymore than I need to to save a buck. I'd rather finance a new(er) car at 0-2% interest, keep my money in my pocket, drive the car for 8-10 years until it starts breaking down again and go do it again.

I have no interest in buying 150K mile $5K clunkers and missing out time playing with my kids on the weekend because I need to replace wear-and-tear items. My time is valueable

I don't think Boston_Burbs really meant buying a new car is a poor financial situation for everyone. It's a poor financial situation for some people, but if you can afford it then great. Just be prepared to pay a higher excise tax. Also, no one said you have to buy a 150k mile clunker. The alternative to a new car is a nice 3-year old CPO, which carries a much lower excise tax rate. Drive it for 5-7 years and then buy another CPO. The time spent wrenching your CPO from years 3 to 10 is the same as the time you'll spending wrenching the car you bought new during years 3-10 right?

The excise tax law in MA is what it is. Not everyone likes it, but there's nothing we can do about it. Buying a 3 year old CPO is one way to get around the high motor vehicle excise tax that MA charges in the first couple years of a vehicle's life.

[Shrewsburried]

Originally Posted by Boston_Burbs

I dont want to derail the thread but I used to hold the same views as you two but then I saw the light!

Car Strategies to Cut your Costs in Four (or more)

New Cars and Auto Financing: Stupid, or Sensible?

While I appreciate his points, I do believe this logic best applies to areas of the country with arid/dry climates and less inflated used car prices. Used cars in the Northeast are very expensive due to their highly consumable nature (the life span of a Northeast car is significantly shorter than , say, Colorado). IMO, the smartest financial decision for an MA resident is to buy new with great incentives and resale value (e.g., Subaru Forester bought in December with 0% financing), or very used but well maintained (e.g., 120K mile dealer serviced 2004 Jetta TDI private sale), or buy specialty (e.g., 2003 miata, garaged winters, <60K miles). Which route you go is largely an issue of personal finances, profession (need to drive clients?), and personal life (got 3 kids?).

His example also assumes both buyers are driving the vehicles for their "usable life" and not flipping with great frequency.

Since 2008, I have bought 3 new vehicles. I always buy during off sales months (e.g., July/August, Nov/Dec) and from high volume dealers sitting on inventory with manufacturer kick backs.

- 2008 Mazda 3

Bought for $18.3K @ 0% financing, drove for 67K miles, sold for $13.6K

- 2009 Mazdaspeed 3

Bought as inventory leftover for $17.6k @ 2% financing, drove 65K miles, sold for $15.2K

- 2014 Subaru Impreza

Bought for $18.3K @ 0% financing, driven 25K miles, KBB value at current mileage is $19.5K - $21.6K

Assuming I sold my Subaru tomorrow for $20k, that means I've spent $5.4K to drive 157K maintenance free miles (beyond oil changes) + sales, excise, and gas. Yes, I've paid a considerable amount of sales and excise tax, but sales tax on a 2-3 year used car is not insignificant (in some cases more, as when buying new the state tends to tax on purchased price and not MSRP/book). Also, because my borrowing rates have been so low, I don't have to tie up a lot of cash for a down payment, instead placing money in high return funds until I look to cash out of the loan and acquire the cars title.

In my opinion, the biggest suckers out there are those buying 2-4 year old low mileage vehicles - one ends up paying a premium due to inflated used car prices and paying for maintenance at $90+ shop rates and owning during the worst periods of depreciation (for Japanese makes anyhow)

Anyway, back to the topic. Excise tax? Don't mind it as it's fairly progressive. I DO hate, hate, hate sales tax on used vehicles.