February 11, 2009

New Tax Credit for Car Buyers in 2009

As part of the $1 trillion economic stimulus package, the senate voted to add an $11 billion provision that will give car buyers a tax deduction for the sales tax and loan interest on the purchase of a new car between November 12, 2008 and the end of 2009.

This new tax credit will save car buyers about $1,500 on the purchase of a $25,000 car. That's equivalent to a 6% discount off the total cost of the car.

The bill may get revised but it looks likely to pass. Along with huge rebates and discounts, this adds icing on the deal-making cake. If you can afford it, 2009 is a great year to buy a new car.

Some GM Dealers Able to Offer Better Deals Than Others
GM is desperately trying to reduce their inventory of cars piling up. To combat this, they just started a new incentive program to encourage dealers to order more cars.

Usually, dealers order cars from GM based on the number of cars they think they can sell. With sales crumbling, dealers don't want to order extra cars. But GM is offering bonus dealer cash up to $1,250 per vehicle for dealers ordering more than they need. The special program is effective until March 2, 2009.

Many dealers simply can't afford to order more cars than they need. What this does is give a price advantage to those dealers who can. Basically, the dealers that get this bonus cash can price their cars lower than the competition.

This is a perfect example of why it pays to contact as many dealers as possible. You never know which ones are getting the extra incentive. Follow our Car Buying Strategy to take advantage of this program.

Rebates Up Over 12% Since Last Year

Edmunds.com has computed the average rebate for a new car last month: $2,714. That's 12.5% higher than rebates a year ago. With sales taking a beating, deals keep getting better and better.

One of the reasons for the increase in rebates is due to dealers needing to clear out their leftover inventory from the 2008 model year. The highest rebates being offerd were for premium sports cars with an average rebate of $5,297.

When it comes to specific brands, Lincoln offered the highest rebates at $5,594 per vehicle followed by BMW at $4,965 per vehicle. To see what rebates and prices are currently being offered for the car of your choice Get a Free Price Quote.

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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