Thanks! Those were very informative reviews. Lots of good user reviews, too.

Don

Thanks for the info guys. You're all probably right about it not making financial sense. It was a whimsical idea I had after reading about the 2006

its moments like these whom im glad forums like this exsited.

i got around 20 km a liter when i drove a civic 5 spd using advanced hypermiler techniques
and now I drive a salvage nwh20 prius that gets almost to 25 km/l with 195,000 km to date.

My vote is also no.. you will lose a lot of money in the trade in... kind of offsets the gains.

Just think... in 3 years they will redesign it again and you will once again be tempted.

Okay, I change my vote. Well, not really change it. More like, add to it. I still vote no. But now I'd like to add that I agree with blueskies. Wait for the next redesign! THEN I'll change my vote to yes.

<Best Tank Economy!><Best Tank Endurance!>

I think you're misled about the tax implications though. You would actually pay tax on the difference of the trade in value and of the new car itself. Say for example you got 18k for your trade-in nad you got the new 06 for 22k. So you would only pay the tax on the 4k.

I don't know if this works the same in CA, but in Washington when you trade in a vehicle you get that value as "credit" on the new vehicle, so you only pay sales tax on the difference. For example, if you're buying a $20,000 car and you have a $12,000 trade in, you only pay tax on the $8,000 difference (not the full $20K). Note they use the cars value, not what you owe or how much equity you have. This would be worth asking the dealership to know what you're in for.

The financials of what you want to do will depend on a number of things. Did you put any down on your 05? What interest rate do you have? I'm not looking for those answers, but both factor in to how much you owe vs. how much it's worth. If your loan is at 5% + you've mostly paid interest the last 6 months. If you got a 1-2% deal you've at least paid more on the loan. For the first 1-2 years, cars generally depreciate faster than you pay them off, so getting out of them is ususally a loosing proposition. So on the bad side, your move to an 06 is likely going to cost you.

On the pro side: if you know you'll eventually want an 06, and it's just a matter of when, there is something to be said about just getting on with it. For example, if you get 48 month car loans, driving your 05 for 18 months then getting an 06 (or 07) on another 48 month contract means you have 66 months of payments total. Making that change at 6 months means you only have 54 months of payments. The thing to factor in is whether the payments on your 06 are that much higher as to offset the difference. Also on the pro side, your 05 will never be worth as much as it is today in terms of trade in / resale value. A year from now, count on that car being 1.5 - 2.5K less in value.

So I agree with the others that financially it's a costly move. However you have to ask yourself is this going to be an annual temptation? It's likely the 06 will have a 3-4 year run before a redesign. If it's the 06 you want to be in during that time, then like I said, there's something to be said about getting on with it. If you'd be content with your 05 for a number of years, financially you're better of staying put.

Good luck with your decision!

*** Retired after 65,000 outstanding miles ***

I doubt you will get $20k for trade in. so i would advice against doing this. You are going to be taking a big financial hit but if you are made of money then go for it.

Hi Livvie:

___I do not know about CA. either but here in IL., you save the tax on the difference during trade. If this is the case in CA., it may behoove a trade in as $18K x 8% (that is CA. tax rate, right?) = $1,440. If the dealership can come within $1,500 - $2,000 of PP (Private Party), the trade begins to make sense. I just do not see even $18K for an 04 HCH-I w/ that many miles in trade. Remember that the 06 HCH-II costs the dealer something like $20.5K – a healthy hold back and there is no way they are going to offer $20K for a 2 year old with miles for any thing close to what they can stock there lot with a new one for. Unless their allotment for HCH-II’s is 12 per year/1 a month or some other such non-sense?

___Personally, a sale to a PP and then go pick up an HCH-II from Psyshack’s Honda dealership in OK at $1,300 under MSRP makes a lot more sense to me.

___Good Luck

___Wayne R. Gerdes

I bought an '05 over the '06 a month ago, because 1) Hey $19k wasn't bad and 2) I didn't want to help Honda "debug" a first year model (read: Prius II). And what someone else here said, new model just around the corner, I'm sure. It ain't cheap to keep being the "first kid on the block"!

Bill