Safe Cars For Teens II

Last year I wrote an article listing safety criteria and features that are key to choosing a car for the new and inexperienced driver.  While those points are still valid, I wanted to revisit the 10 models I suggested with regard to price. 

Given the global economic crisis and the overwhelming problems of the auto industry, I updated the average retail pricing information in my original blog.  I was surprised that any drops in prices from the 2005 models I reviewed to the 2006 prices were not as dramatic as I would have envisioned, with only a few exceptions. 

You may read the original, full article posted elsewhere in my blog, which not only provides critical decision-making criteria for your purchase, but gives links to the government crash and rollover testing and rating sites, where you can make your own safety evaluation of the potential vehicle purchase.

These were the same 10 models from the prior article, which consistently do well in all of the tests and consumer ratings for safety and reliability, as well as popularity with teens for looks and features like handling, sound systems, and opportunities to customize with cosmetic upgrades. We put together this list based on the results of the safety crash tests done annually by the National Highway Traffic Safety Administration, and for the affordability of the vehicle’s cost as a 2- or 3-year old pre-owned vehicle (2006 coming off of manufacturer lease). Most are recommended in the 4-cylinder model (sounds sluggish, but they are actually quite peppy and handle well). If your teen is paying the bills he or she will appreciate the fuel savings of the 4-cylinder choice! The benefit of a car less than 5 years old is that most desired safety features are now standard.

1. Honda Civic – Honda consistently tops these lists of safety and reliability. The 4-door model received 4 and 5 star ratings. The 4-door Civic can easily be found with a 4-cylinder engine. Comfortable, reliable, sporty-looking, and affordable (which is a relative term). Honda is a mid-ranged priced vehicle as compared with the others on this list. Current average retail for the 4-door EX model is approx $15,000.
2. Honda Accord – Also available with a 4-cylinder engine, a perennially well-rated car for safety and reliability in both the 2- and 4-door models. Sporty looks have improved considerably over the years. Current average retail for the 4-door EX is approx. $16,500
3. Toyota Corolla – The 4-door model is well-rated and affordable with an average retail price of $11,500. The Toyota Avalon (also 4-door model) is also well-rated but cost about $5,000 or more than the Corolla.
4. Mazda 6 Hatchback – with Side Airbags, this is also a highly rated model for safety. The hatchback gives it a sporty look with a bit of interior room. Usually costs slightly less than the Honda Civic, in the average range of $14,000
5. Acura TSX 4-door with side airbags – 5-star driver front and side crash test, 4-star rollover test (2-wheel drive model). A higher-priced choice, at about $18,900.
6. Scion tC – very roomy coupe, 160-hp 4-cylinder, with other standard features like sunroof, 17-inch allow wheels and many safety features. A 3-door hatchback. Well rated, and reasonably priced. A Toyota product in the $14,900 range.
7. Volvo S40 – Volvo has always enjoyed a reputation for safety. On par with the Hondas for pricing.  Average retail is currently about $14,500. 
8. Pontiac G6 – the 4-door model is well-rated for mid-size cars. A 4-cyl model was newly available in 2006. Average retail cost is currently around $11,000.
9. Subaru Forester AWD – well-rated SUV, 4-cylinder turbo. The 2006 model is hard to find.  If you can, it should run approximately $15,000 retail.
10. Honda Pilot – Highly safety-rated, with Honda reliability. Good visibility, roomy interior without excessive exterior size. But a bit pricy for a first vehicle at approximately $18,000 current retail.

All of the vehicles that we chose to include on this list are the 2006 models, and none have any crash or rollover ratings less than 4 stars, which we feel is an important criteria for the inexperienced driver.

You can also print the NHTSA annual publication “Buying a Safer Car” which provides great detail about each model tested for that year, including safety features (the 2006 brochure is still available). This will give you a condensed list on which to make notes at home with your teen while narrowing down your search for the perfect vehicle for your needs.

Buying your teen a car can be a fun family experience.  Just don’t lose sight of the important safety factors and make an emotional decision.  Automobile crashes are the leading cause of death amoung teenagers.  So choose wisely and drive down that statistic. 

Happy Motoring!

Donate Your Car To Charity

You have received these offers in the mail and seen them in the newspapers.  “Donate your car to charity and receive a tax deduction!”.  Are they for real?  For the most part, yes.  Many not-for-profits would be thrilled to have a donation which will further their mission.  A donation worth possibly several thousand dollars is a windfall to many charities.

 

Is it really tax deductible? Again, yes, for the most part.  If you itemize your taxes.  There is some figure that is the correct amount to enter on your tax return as the value of your donation.  But what is it? 

 

Originally, the IRS allowed a taxpayer to donate a car to charity and deduct the “fair market value” of the vehicle.  As you can imagine, this got a bit out of hand.  The taxpayer’s interpretation of “fair market value” seemed to be a bit higher than the IRS’s interpretation.  People were deducting the full amount that a car dealer “might” get reselling the vehicle at full retail.  Not quite what the government had in mind. 

 

The charity certainly did not get the benefit of anything near to the taxpayer’s estimate of value.  Most charities use a service or “middleman” to sell the vehicle, and after paying a commission, the charity is left with a small portion of the originally intended donated amount.  This method usually results in the lowest percentage of the sales price to the charity – sometimes as little as 20% of the sale price.

 

In January 1995 the IRS changed the rules so donors need to do some research and paperwork before figuring the value of their donation. 

 

1)                   The charity must have a valid 501 (c)(3) tax status with the IRS. Any qualified organization should be happy to provide you with a copy of their certificate verifying this tax status. 

2)                   Speak with someone at the charity to see if a donated vehicle fits with their needs.  Some will actually use the vehicle for their operations instead of selling it for the funds.  A maintenance van for a charity which operates subsidized housing, a hatchback or mini-van for a program which delivers meals to home-bound residents, etc.  Some will prefer to sell the vehicle for the cash to further their operations.  Some may prefer not to go through the steps necessary to sell a vehicle.  Find out what their needs are to ensure that your donation makes the most positive impact. 

3)                   If your car is valued at more than $500 your deduction is limited to the charity’s Actual Selling Price.  The charity is obligated to provide the donor with a statement of sale, which the donor is required to attach to their tax return (the donor is not entitled to know the deduction amount prior to donating the vehicle).  This will almost always be substantially lower than the donor’s intended donation, especially if a “middleman” service if involved.

4)                   If the charity decides to keep the vehicle and use it for their own needs (maintenance, delivery of goods and services, etc), the donor must determine the fair market value of the deduction.  But be warned, the government believes that the fair market value will likely be substantially different (read, “lower”) than the “Blue Book” value.  If your vehicle donation is valued at over $5,000 you must obtain a written appraisal by a qualified appraiser no more than 60 days before you donate the car.  Most donors don’t take into account the condition of their vehicle, and the value of any repairs necessary, which will lower the deductible value.  Edmunds TMV Used Vehicle Appraiser is a good tool for estimating the value of your donation. 

5)                   For any donation over $250 you must receive from the charity a written acknowledgement, detailing the services given and received for this donation.  See IRS Publication 4303 for detailed information on this statement, which should be retained for tax purposes. 

6)                   State law requirements for vehicle titles – check with your state DMV about the process of transferring the title of your vehicle to the charity.  And don’t forget to remove your license plates, unless state law requires otherwise.

7)                   Check with your CPA about the validity of any deductions.  It’s not just as simple as claiming a charitable donation.  Before filing an erroneous tax return, get professional, qualified advice.  Doing good should not hurt!

 

Of course, if you are so inclined to make a donation to charity, there is another route – sell the car yourself and donate in the form of a check.  You are more likely to get closer to “fair market value” through this sale method. It’s more straightforward for your taxes as well. 

 

Whichever route you choose to take, we wholeheartedly encourage and applaud your community spirit!