I agree wholeheartedly (as my imminent ownership of one of each is about to attest...).

I do think some misinformation is being given out by the Toyota dealer I visited, however - I asked "why would anyone buy a Prius NOW, with the tax credit available for waiting just over a month?" and was given a line about how the tax CREDIT only benefits someone who owes money to the IRS (as opposed to someone who is getting a refund of a portion of the amount withheld, not someone with NO tax liability at all), but the DEDUCTION (2005) benefits everyone. That is just plain wrong! (1) a DEDUCTION benefits anyone who would otherwise have a tax liability, whether some or all of that amount has been withheld, but (2) a CREDIT also benefits anyone with a tax liability (even if less than the amount withheld, i.e., a refund situation - it merely increases the amount to be refunded), and MAY (depending on the particulars of the law) also benefit those with NO tax liability! Some people who have had NOTHING withheld, and owe no tax, may get money from the IRS if they qualify for certain credits (in NY, I think the Property Tax credit works that way, the Federal EIC may also).

So this guy was BSing people into buying the few cars he has coming in in Nov. and Dec. that aren't "spoken for", by telling them that they would benefit from the deduction but not the credit, when if there is a difference at all it would be the reverse.

As I see it, the only benefits of buying now are (1) lower price for '05 models - hmmmm, I wonder if that offsets the difference between the deduction and the credit, on the other hand a later model year will probably have better resale value at any given time in the future; (2) you get your tax benefit a year earlier (in early '06, instead of '07 when the '06 tax returns are filed), IF it benefits you at all (if your income is already so low that you owe NO taxes at all, then a deduction - reduction in taxable income - is of NO benefit); and (3) you get your car NOW (like, if you NEED to get one now and can't wait, a situation I was once in, years ago).