But I could handle $40,000 or whatever the resale value on those things is.
This came up when I was watching Ellen, which I do a couple days a week. She’s giving away GMC Acadias right now. Wednesday, some lucky (?) person is going to win one.
The question is—what would it mean for me to win one?
1. Taxes. I think there are taxes on that kind of thing, like on the lottery. I almost definitely couldn’t afford to pay them. That’d stop me right away.
2. But even if I got past the taxes, there’d be the extra upkeep. We only have one car and really only need one right now. More tune-ups, tires, etc.
3. More gas. I wouldn’t be surprised if the Acadia (and SUV type) uses a lot more gas than our sedan. And if I drove it at all, I’d automatically be getting less for my gas money. And I might drive more, since it’d be more convenient. Again, more gas.
4. Risk. A new SUV seems a lot more attractive to thieves and carjackers than our older sedan. Driving/parking in some DC areas, that’s a concern. Even in the nice areas (especially in the nice areas?).
On the plus side, I could sell it—maybe the resale value would be a little lower, but if I won it I have a good explanation for why it’s unused. Then I would have cash in hand to pay the taxes on it.
I could put the rest of the cash into something I valued at the time—debt repayment, savings, etc. If I won it today, I’d use it to pay off the car and figure out how to use it best for debt repayment and investing.
But, what I wonder is—if you win a car on Ellen, can you keep it?
When JD did his Wii giveaway, he said it was fine if the winner wanted to resell it and use the money. I’m just not sure if Ellen and other people who giveaway cars and the like are ok with that. You might have to sign some kind of waiver saying that you’d use it. In that case, I wouldn’t take it. Too much expense.
Does anyone know how such giveaways work? It could be a sweet deal, but it could also be more of a burden than a blessing.
14 responses so far ↓
1 Kacie // Feb 27, 2008 at 6:09 am
A few years back, I was a contestant on the Price is Right.
I won about $5k worth of prizes (A chair & ottoman, tons of dishes, and a giagantic bed).
I had to pay California sales tax on those items.
In addition, I had to claim the prizes as income on my taxes that year.
Lol. So, in all, it cost like $500 for those prizes. The awesomeness of it all is worth it. Plus, I like the loot.
2 Funny about Money // Feb 27, 2008 at 8:18 am
How can they stop you from selling something you won? They have to sign the title over to you…surely there’s no way they can forbid you to turn it around.
Hereabouts a big hospital throws an annual upscale lottery–tickets are $100 apiece, but the gifts are extravagant: amazing trips, amazing cars, shiny new McMansions. For some of them, you can take the cash equivalent; some not.
Personally, I wouldn’t want to be stuck with the tax bill on a Mazarati or even on a Jag. And certainly not on a big ugly McMansion, no matter how depreciated the price. But I don’t think they can stop you from selling the loot, especially if it had to be sold to cover taxes on it.
Boyoboy. Everyone needs a new SUV to fill up at three bucks a gallon! I wonder if you COULD sell the thing?
3 Curtis // Feb 27, 2008 at 9:28 am
I did this same thing about the HGTV Dream Home Giveaway recently. I looked through the rules and found that they actually give you a 1099 form for the value of the home and car. That’s to the tune of 2.2 Million! That would add about $600k to my tax bill minus whatever depreciation I can claim the first year. Don’t think I could be affording that. Sell and use the proceeds to pay taxes and pay off all my debt is the only option.
4 BeThisWay // Feb 27, 2008 at 9:51 am
Once they give you the item it is yours to do with as you see fit.
I’d likely sell it for the cash, too. And if I won t he HGTV Dream Home Giveaway I’d sell that house and but a nice home where I really wanted to live, which would certainly not be the Florida Keys.
Now if I had won that Asheville house last year I’d have been crying about selling it…
5 Becky@FamilyandFinances // Feb 27, 2008 at 10:17 am
I actually won a classic car from the local oldies station a couple of years ago. I kept it for a year to have some fun with it and then sold it and made a nice payment on my car loan for my daily driver.
I ended up not having to pay taxes on it, but I don’t remember why it worked out that way.
Anyway, there were no rules or anything from the oldies station about not being able to sell the car immediately if that’s what I had wanted to do.
6 Future Millionaire // Feb 27, 2008 at 11:29 am
At the risk of being one of those annoying people that blatantly post their blog…
I wrote a very similar post on the 20th about winning a GMC truck, here’s the direct link to it. http://tinyurl.com/2×4eb8
Okay now that I did, don’t hate me forever.
MM says: Don’t worry, I don’t hate you forever. I did change it to a Tiny URL so the page didn’t look funny. But it was on topic.
7 Aryn // Feb 27, 2008 at 12:55 pm
Once it’s yours, it’s yours to sell or keep. Money magazine actually did a story one the only HGTV dream home winner who actually kept the house (apparently offers flood in after you win). The upshot was that they couldn’t afford to keep it - it was costing them more to maintain than they earned in a year.
8 Llama Money // Feb 27, 2008 at 1:35 pm
I’d love to win a new Acadia. As soon as the title was in my name, I’d be heading over to Autotrader to list it for sale. I have no need for such a large vehicle, and wouldn’t like the tax bill. But even after the tax bill, you’d have a big pile of cash after selling it to someone who does have a use for it. So I say, bring it on, I’ll even take two.
9 CatherineL // Feb 27, 2008 at 2:09 pm
Hi Mrs M - I remember reading that when Oprah gave away cars to the audience, the winners had to pay taxes. But, it’s better to pay taxes on something than not win anything.
If it were me, I’d sell it and use some of the cash to buy a more economical car.
10 Minimum Wage // Feb 27, 2008 at 4:17 pm
Ellen is giving away Canadian cars?
11 mrsmicah // Feb 27, 2008 at 4:25 pm
MW, I don’t know if the Acadia is Canadian or not. I think GMC is an American manufacturer…but in today’s globalized economy, who knows if any company is really any nationality anymore.
12 Dad // Feb 27, 2008 at 5:53 pm
People keep saying once you’ve won it, it’s yours. However, make sure you check the fine print. IF you have to sign a contract saying you would not sell it if you won to get the prize, you are bound by the contract. In a sense it is not quite yours in that case. I don’t know if any of them do that. It is more like to happen if they want more than the initial publicity of the prize giving. But always check the fine print.
13 Minimum Wage // Feb 28, 2008 at 1:02 am
mrsmicah:
That was a joke. Wikipedia is our friend:
Acadia (in the French language l’Acadie) was the name given to a colonial territory in northeastern North America that included parts of eastern Quebec, the Maritime provinces, and modern-day New England, stretching as far south as Philadelphia. The actual specification by the French government for the territory refers to lands bordering the Atlantic coast, roughly between the 40th and 46th parallels. Later, the territory was divided into the British colonies which were to become Canadian provinces and American states.
14 RacerX // Feb 28, 2008 at 7:05 pm
We just did a giveaway thith Ellen at my Real-Life gig. Prett restrictive on how you can promote and stuff afterward.
But…because of the flack that Oprah got about the car giveaway, Ellen makes the giveaway companies pay the taxes…which is good, but raises the amounts!
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