Car Buying Report - April 8, 2009


Government May Give $5,000 Incentive to Trade-In Old Cars

A new "cash for clunkers" bill introduced last month to help stimulate new car sales has been gaining steam. Representative Betty Sutton introduced a bill called the CARS act which would provide tax incentives of between $3,000 and $5,000 to consumers who trade in vehicles that are at least eight years old for new ones that get better gas mileage.

There are some limitations: First, the incentive only applies to cars assembled in North America. The fuel economy rating of the cars have to be at least 27 mpg (if assembled in the US) or 30 mpg if assembled in Canada or Mexico. Trucks would have to be rated at least 24 mpg. The total incentive would be based on how fuel efficient the car or truck is. Furthermore, the incentive only applies to new cars that cost less than $35,000 and would require the owner to scrap the old vehicle (you cannot resell it).

A similar program in Germany resulted in a dramatic rise in new car sales. There will probably be an increase in sales here in the US as well, but not everyone will come out ahead. The program will impact resale values of late-model used cars. If you have a 1 or 2 year old car, you can expect to see the resale value drop around $500 on average if the plan becomes law.

If you currently own an older car that you wouldn't mind scrapping, it might be prudent to wait a few months and see if this act passes. You can then trade in the car and get a tax credit worth up to $5,000. Another riskier way to benefit from the program is to purchase an old junk car now (you can get them for as little as $300). Wait to see if the program becomes law, then trade in that car for a new one.


Financing a GM Vehicle Has Gotten Easier

GMAC (the financing arm of GM) will make available $5 billion in consumer auto loans over the next 60 days, including loans to sub-prime customers (those with low credit scores). Up until now, consumers didn't have much choice when it came to financing a GM vehicle. You had to have a great credit score and put a decent down payment.

If you're interested in a GM vehicle but were afraid you couldn't get financing, now is the time to step back into the dealership. GM dealers are desperate to sell cars and are giving some great deals. Furthermore, the government has guaranteed all warranties for GM vehicles in case the manufacturer goes bankrupt. But please be cautious. The economy is still far from recovery and unless you have a very steady job, we advise against purchasing a new car if you have bad credit and no savings.


Looking to Buy a Ford Fusion or Mustang? Now is the Time

The 2010 Ford Fusion and Ford Mustang are starting to hit dealer showrooms but Ford has a big problem: There are still plenty of 2008 and 2009 models sitting on the lots. In order to move this inventory, Ford has jacked up the incentives. The average incentive for the Ford Fusion is now at $3,500 while the Mustang has around $3,000 in incentives. We're also confident there's hidden dealer incentives to help move these cars. Bottom line: You're sure to get a good deal on a 2008 or 2009 Fusion or Mustang. If you've been wanting this car, now is the time to buy while there's still a good selection of inventory.

To see the latest prices and deals being offered by your local dealer Click Here


Lexus Increases Prices on 2009 Models

It's not unusual for auto manufacturers to raise prices as the year progresses, but many have not done so due to the economy. Not so with Lexus. They will be raising the prices on most 2009 vehicles by about $150. This only applies to vehicles built after April 1, 2009. So if you're interested in buying a Lexus, doing so soon may save you $150.



Car Buying Report Archives:

  Week of June 18, 2009

  Week of June 11, 2009

  Week of June 4, 2009

  Week of May 28, 2009

  Week of May 21, 2009

  Week of May 14, 2009

  Week of May 6, 2009

  Week of April 30, 2009

  Week of April 23, 2009

  Week of April 16, 2009


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