My Gas Guzzler

How did we get into this gas guzzling mess to begin with. Well…it all started a long time ago…the US Government decided that it would be a good idea for businesses to be able to write-off large vehicles for "business" purposes. Hmmm…sounds like a gray area for me. Let take a look:

Auto maker – we can sell lots of these high cost, high profit vehicles to business owners and they can write it off…sold!

Oil companies – These vehicles guzzle lots of our products…hey were on!

Business owners – we can write off the cost of these vehicles through our "businesses" and only need to use it for 50% of the time….let’s do it!

As a person of today…What were YOU Thinking?

In the year 2003 – To qualify for the deduction (Section 179 of the tax code), an SUV or light truck must have a gross weight of at least 6,000 pounds. This is the vehicle weight plus maximum payload and also is referred to as gross vehicle weight rating or GVWR. Before buying any vehicle for your business, always verify the GVWR for yourself. It usually is found on a label attached to the inside edge of the driver’s side door.

Here is a list from 2003:

BMW X5
Ford F150 Styleside 4WD
Cadillac Escalade ESV
Ford F250 Super Duty Super Cab
Chevrolet Astro Passenger Van AWD
Ford F350 Super Duty DRW Super Cab
Chevrolet Avalanche 2500
GMC Safari AWD Passenger Van
Chevrolet Express Passenger Van 3500
GMC Savana Passenger Van 3500
Chevrolet Silverado 3500
GMC Sierra 350 &
Sierra Denali
Chevrolet Suburban 2500
GMC Yukon XL
Chevrolet Tahoe
Hummer H1 & H2
Chevrolet Trailblazer
Land Rover Discovery
Dodge Durango
Land Rover
Range Rover
Dodge Ram Cargo Van 3500
Lincoln Navigator
Dodge Ram
MaxiVan 3500
Lincoln Blackwood
Dodge Ram Wagon
Mercedes M Class 320 and 500
Dodge Ram 1500
Mercedes ML55 AMG
Dodge Ram 2500 & 3500 two-door
Porsche Cayenne, S and Turbo
Ford Econoline E350 Van
Toyota Land Cruiser
Ford Econoline E350 Passenger Wagon
Toyota Sequoia 4WD
Ford Econoline E-150, E-250 and E-350
Toyota Tundra 4WD Access Cab
Ford Excursion
Volkswagen Touareg
Ford Expedition
Volvo XC90 (optional third row seating)

The the deduction is limited to $100,000 or your overall business income, whichever is less. Also, to get the tax break you must use the vehicle more than 50 percent for business.

Here is a list of the heaviest vehicles sold in the states in 2008:

CHEVROLET Suburban 2500 6L
CHEVROLET Suburban 2500 6.2L
PORSCHE Cayenne Turbo 4.8L
LINCOLN Navigator 5.4L
GMC Yukon 2500 6L
GMC Yukon 2500 6.2L
HUMMER H2 6.2L
FORD Expedition 5.4L
HUMMER H2 6L

These vehicles are not required to share mileage ratings due to the over 8500lb (CAFE) status each holds.

Corporate Average Fuel Economy (CAFE) is the sales weighted average fuel economy, expressed in miles per gallon (mpg), of a manufacturer’s fleet of passenger cars or light trucks with a gross vehicle weight rating (GVWR) of 8,500 lbs. or less, manufactured for sale in the United States, for any given model year. Fuel economy is defined as the average mileage traveled by an automobile per gallon of gasoline (or equivalent amount of other fuel) consumed as measured in accordance with the testing and evaluation protocol set forth by the Environmental Protection Agency (EPA).

Interesting how many are from GM…hmmm. What were YOU Thinking?

General Motors announced that they are finally waking up to the realization that their vehicles really suck – the gas that is. GM is looking into selling the Hummer brand or modifying it’s product line. Here is an excerpt from the GM website news section:

Strategic assessment for Hummer brand

Finally, GM is undertaking a strategic review of the Hummer brand to determine its fit within the GM portfolio. At this point, the company is considering all options, from a complete revamp of the product lineup to a partial or complete sale of the brand.

Moving forward

"We are making a number of important announcements today, covering everything from product and technology investments to capacity adjustments to a strategic review of our Hummer brand," said Wagoner. "These moves are all in response to the rapid rise in oil prices and the resulting changes in the U.S., changes that we believe are more structural than cyclical.

"While some of the actions, especially the capacity reductions, are very difficult, they are necessary to adjust to changing market and economic conditions and to keep GM’s U.S. turnaround on track and moving forward."

Hey GM, glad you finally heard the wakeup call and see the tunnel…watch out for that freight train heading your way….

GM should get a clue and help the workers that it employs and produce a product that the world needs and not a product for the shareholders. More sales of a demanded quality products will save you and your assets too. What were YOU Thinking?