Correct....but I would rather have the $43,000 today.
When I sell it at some time in the future, I will have the selling price come to me as income. This can be mitigated by being in a lower tax bracket in the future and/or it can be offset by purchasing a new vehicle.
The bottom line is that the savings is in today's dollars...I literally transfer the money from my tax account into my own account. This is far better than a much lesser amount in the future...especially when I can defer taxes on this forever....or until they are a fraction of the $43K I am pocketing today.
Obviously it is far more prudent to save the money altogether.....but if the future is planned for than there is nothing wrong with living a little today.
You can't take it with you.
Mac - Not sure what is out-of-focus for you...I didn't spend a year looking for a Hummer...I recall starting a search somewhere around June. I have owned Porsches for 15 years so I am always looking at their products. I said I was merely "testing the waters"...I did not say I was buying one tomorrow.
The tax law changed in late May so all this is new for everyone - 3 months ago the limit was $24K.
My income is more than enough to take advantage of this credit and I see little or no risk to do so. The tax credit is a HUGE loophole...if anything, I think it is under-rated.
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