The Tax Opportunities for LED Lighting in Car Dealerships


In the wake of the restructuring of the U.S. automobile industry, the U.S. car market is now dominated by seven major consolidated car companies: General Motors, Ford, Chrysler/Fiat, Toyota, Lexus, Hyundai, and Honda. In particular, as the U.S. brands recover, each is re-imaging itself as energy efficient by driving down all car models’ fuel consumption and consolidating their number of dealerships. In the quest to reduce operating costs these dealers are investing in facilities that match their brand’s fuel efficiency efforts.

To get an idea of the kind of fuel efficiency efforts U.S. auto brands are making, consider Ford’s new EcoBoost engine. According to Ford, the EcoBoost engine combines advanced direct injection technology and turbo-charging with a gasoline engine. The end result is an engine that can deliver up to 20 % better fuel economy, 15 % lower CO2 emissions, and improved driving performance when compared to larger displacement engines.

Car dealers are interested in both energy efficient indoor lighting and energy efficient outdoor lot lighting. They are increasingly very comfortable with LED lighting technology because they have witnessed it mainstream into automobile headlight and taillight applications. LED’s are now mainstreaming into dealer showrooms and outdoor lots.

The Section 179D EPAct Tax Opportunities

Pursuant to Energy Policy Act (EPAct) Section 179D, car dealerships making qualifying energy-reducing investments in their new or existing locations can obtain immediate tax deductions of up to $1.80 per square foot.

If the building project doesn’t qualify for the maximum EPAct $1.80 per square foot immediate tax deduction, there are tax deductions of up to $0.60 per square foot for each of the three major building subsystems: lighting, HVAC (heating, ventilating, and air conditioning), and the building envelope. The building envelope is every item on the building’s exterior perimeter that touches the outside world including roof, walls, insulation, doors, windows and foundation.

Unique 2011 Opportunity: Enhanced Bonus Tax Depreciation

Outdoor lot lighting is ordinarily eligible for MACRS depreciation, but building owners who install LED lighting systems after September 8, 2010 through December 31, 2011 can take 100% depreciation tax bonus immediately. Even if building owners miss this 2011 window, they can enjoy a 50% tax depreciation bonus on equipment placed in service from January 1, 2011 through December 31, 2012.

Outdoor Lot Lighting

Outdoor lot lighting is lighting that illuminates only the landscaping or building exterior (but not parking areas or walkways) as well as plant-grow lights, but which does not relate to the operation or maintenance of the building. Outdoor lot lighting systems are usually pole-mounted or freestanding and serve to illuminate sidewalks, parking or recreation areas.

For the first time in U.S. Tax History, based on the bonus depreciation benefits described above, 100% of the cost of an outdoor lighting project can be expensed for tax purposes.

Dealer Facility Restructuring at Ford, General Motors and Chrysler

With the total number of U.S. dealerships falling from more than 30,000 to about 18,000, when sales volumes recover each dealership will by definition have to be a much larger facility capable of supporting higher sales and service volumes. There is an overall decline in U.S. car sales over the last decade and a drop in the number of car dealerships since 1970.

When energy efficient tax incentives were first enacted in 2005, foreign car dealers were financially strong and focused on dominating the market for small, efficient cars, which meant that it was primarily the foreign brands that were making energy efficient lighting upgrades to their dealership locations and taking advantage of the EPAct tax savings. For instance, Emich Volkswagen of Denver has installed LED lighting throughout its new and used car dealership. The LED retrofit project reduced Emich VW’s lighting energy use by nearly 80% and the dealership will earn a return on its investment in approximately 18 months based on energy savings from its LED lighting and conservation rebates offered by Xcel Energy and the City and County of Denver.

Because of their restructuring and the market demand for more efficient vehicles since 2008, American car brands have followed their foreign counterparts’ lead.

Federal Lighting Bans

Dealerships that have not upgraded lighting in the past five or more years often have inefficient T-12 or metal halide lighting whose production or importation is now banned by the federal government. Therefore, sooner or later these dealers will be forced to upgrade to more efficient lighting like T-5 and T-8 fluorescents, or the new highly efficient LED lighting.

LED’s are up to four times more energy efficient than traditional incandescent bulbs, which means that their ability to drive down energy operating costs is twofold: energy savings and their related tax savings.


Ford has shuttered its long-standing Mercury brand. Accordingly, it has opted to consolidate certain Ford and Lincoln dealerships around the country. Some exclusively combined Lincoln-Mercury dealers experienced less gross sales volume than Ford only or combined Ford-Lincoln dealerships. While there are many factors that influenced Ford’s decision to cut back on the Mercury brand, what is important is the effect a reduced number of brands will have on Ford’s dealership strategy going forward.

Fewer brands in its portfolio, combined with its improving financial situation, will allow the automaker to focus not only on product quality, but also on cost reductions across the board. Ford’s anticipated annual operating profit of about $8 billion would be its best showing since a $10.2 billion profit in 2000, when U.S. industry auto sales were 33 percent higher. Earning higher profits at a lower sales volume has been one of the keys to the company’s strategy since Chief Executive Alan Mulally arrived in October 2006. Indications are that that some of the required building upgrades will range from $300,000 to $1,500,000 per dealership. Some dealers are balking at these figures, which may result in more closures unless dealers are receptive to the energy and tax savings that come with more efficient lighting equipment. Upgrading to long life energy LED lighting is a way to reduce ongoing operating and maintenance costs.

General Motors

The largest dealership facility reduction has been at General Motors, which has slimmed itself down to 4 brands, namely Cadillac, Chevy, Buick and GM after jettisoning Oldsmobile, Pontiac, Saab, Saturn and Hummer. GM has launched the largest and most widespread re-imaging plan of the domestic car dealers. They sent inspectors to analyze all of their dealerships’ facilities attributes, including appearance, location and overall quality. Many dealerships that were fortunate enough to not be terminated are now obligated to make major facility upgrades.


Chrysler has merged with Fiat, giving Fiat a major U.S. distribution network for its more fuel-efficient product line. Recently reported dealer data indicated that the average Chrysler dealer’s pre-tax earnings fell to $150,000 during the economic downturn. This means that a $15,000 reduction in facility energy operating costs equates to a 10% increase in pre-tax earnings.

Dealers can combine energy efficient LED lighting with energy efficient HVAC in both the conditioned (air conditioned) and non-conditioned portions of the facilities for $1.20 per square foot EPAct tax deductions.


The newly configured U.S. automobile industry is becoming more and more centered on fuel efficiency, both for vehicles and the dealership facilities. By upgrading indoor and outdoor lot lighting to LED’s, dealerships have the opportunity to significantly reduce their energy expenses while realizing substantial tax savings.

Start a Car Dealership in the BEST Location (This Tool Used by Multi-Million Dollar Dealers)

In starting a used car dealership, location used to be one of the most important factors, and it still is very important today. Common sense tells us that if people can’t SEE us, how can they BUY from us. That’s where advertising and marketing come into play, but those cost money.

In my book, I point out many strategies to acquiring new business, even if you don’t have an ideal location. However, if you’re able to start your business in a location where MANY prospects drive by, your odds of success are greatly enhanced.

What else have you done by choosing a strategic, high traffic location? You DRASTICALLY reduced your advertising and marketing costs. If you had a high traffic location, you wouldn’t need to advertising as much in the beginning because your location alone is your billboard; it’s your advertising media.

But how do you find the “BEST LOCATION”? Well here’s where I can help. I’m going to give you a “Crystal Ball”. Yes, a VALUABLE tool you can use to research your specific area and see where the highest volume of traffic is located BEFORE you start your used car dealership.

Here’s the secret. It the D.O.T.! YES, the U.S. Department of Transportation!

Now you may think this is painfully obvious, but wait, look at this tremendous tool!

Once on their website, click DOT AGENCIES. Find the Federal Highway Administration (FHWA). Listed on their website is a link to all the FHWA Web Sites, and from there, a complete list of 50 State Transportation Web Sites! Presently, this is the active link:

Now, here’s where we can get down to business. All 50 states are listed on this page, but for sake of discussion, let’s choose Wisconsin in the great lakes region.

Click on the Department of Transportation link under Wisconsin. You should be taken to another page, then click this link and you should be taken to the Wisconsin D.O.T. homepage.

Now, I’ve checked out all 50 states and each of state offers similar information to Wisconsin. You’ll want to search, or click on information regarding to Travel. Wisconsin has a link for Travel Information, so click on it.

The next page will have a number of links on it, but you want to look for one that states, Traffic Counts; click on it.

Now there is a lot of data here, so you may want to play around with this, but again, let me show WHAT to look for.

From here, on the left side there should be a link that states something like, “Traffic count maps by municipality”. If you click on that link, you should be brought to another screen and have the ability to select a City, Town or Village. For the sake of our example, click the down arrow on the right side of the first box, and scroll all the way down to Milwaukee. Once selected, click GO.

Alright, from here, you’re going to see a number of maps available listed from 2004 back to 2000. Let’s select a suburb of Milwaukee, since it’s so large. Let’s choose City of Wauwatosa. Notice that an Adobe PDF file comes up with a map of that area. If you zoom in on a specific segment of the map, you can see numbers that list traffic patterns. Some even list North Bound (NB), South Bound (SB), East Bound (EB), and West Bound (WB) traffic.


Think about it! People live in a world of experiences. People remember those experiences by REPETITION. The more they drive by, the more they will remember you and possibly stop in. The key is to build mindshare! If you can be in a better location than your competition, you’re building more mindshare, faster. By finding the HIGHEST Volume Traffic Pattern possible is the key factor in doing that.

Now the next step is to buy a lot and build or buy an existing dealership. Use this strategy in searching for your ideal location, and you are guaranteed to be one step ahead of your competition.

To your massive success!

Locate Ford Dealerships Quickly With Just a Click

Ford Motors Company is one of the only automobile companies having a huge mass of customers along with their enormous selection of automobiles. Being one of the best American Multinational Automaker, Ford Motors have always proved preeminent in producing any of their new automobiles either it is a car or truck. Ford dealers are regularly searched by the local customers and hence, there are websites online that have brought a flexible way of finding a ford dealer online!

Ford Dealers are just a click way:

With all new innovative concept of our site, a customer can seek out a reputed and trustworthy ford dealer by surfing their site. It features an online directory of Ford dealers that makes it easier for customers to find new or used Ford Cars and trucks in their respective areas or location. This is as good as finding dealerships Location by surfing internet from home or bedroom.

What kinds of vehicles are featured for Ford Dealerships online?

This amazing website gives the correct ford dealerships location along with their proper information, phone numbers and address along with an image map and the customers just need to click on the proper state or location, they looking for. All the different kinds of cars and trucks are available for dealership on this website like Ford Cars, Ford Crossovers & SUVs, Trucks, Hybrid & EVs, Commercial and Future Ford Cars. Either you are looking for Ford Fiesta or Ford Fusion, your contract dealer is waiting online in order to sign the best deal with you online!

For example if you are looking for dealer in Ohio, then you just need to click on the State of Ohio from the lists of American States. After that a page will be displayed on their website stating correct information about Ohio Ford Dealers available in the particular state of Ohio. Likewise any customer can carry out a search by selecting the state they are referring to. These lists of Ford Dealers are accompanied with proper address, image map and contact numbers for making your dealership procedure easier and simpler.

Is it worth to find Ford Dealerships online?

Finding any car dealership online with such a flexibility and correct information including a map is hardly heard from any Automobile company. There is no question in doubting these services as they are especially designed for comforting the needs of customers like you and me. Ford dealers are located in each states of America and hence, we can make our search easier by clicking the location button on their website. Either you are staying in Alaska, Ohio, South Carolina, New York, Mexico, Virginia or New Jersey you can make a flexible and easier search of the best Ford Dealer in your area by surfing on the web.