February 18, 2009

New Tax Break for Car Buyers Not That Great

A proposed tax break that would have saved the average new car buyer about $1,500 has been scaled back drastically. The aim was originally to make interest on car loans and the sales and excise taxes deductible from federal taxes.

The final bill makes only the sales and excise taxes deductible which reduces the average savings to about $400. It's still a welcome relief to car dealers who hope the new tax break will drive more sales. The tax break is good for any new cars purchased between November 12, 2008 and the end of 2009.

BMW Buyers: New Incentive Program Pays for First 2 Months of Loan

In an effort to increase sales, BMW has launched a new incentive program that will take care of the first two payments of your car loan. The program covers most BMW models and offers a maximum of $750 per month. The only models not part of the program are the 7-series, X6, X3 and Z4 Roadster.

The program starts March 2 and runs through March 31. Buyers can combine the two free payments with low interest financing which is also offered through BMW.

GM Says Saturn Will Probably Be Discontinued

In what turns out to be terrible news for Saturn dealers, GM's Bob Lutz has stated they will probably kill off Saturn due to poor sales. GM, in order to survive will be concentrating only on its core brands: Chevrolet, GMC, Cadillac, Buick, and Pontiac.

GM will still build Saturn vehicles until at least 2012 and possibly 2013, but after that, it's time to kiss the brand good-bye. If you're thinking of buying a Saturn, know that buying a discontinued brand can result in lower resale values.

Resale Value of 2009 Chrysler and GM Vehicles Slashed

Automotive Lease Guide, the leading data provider of residual values, has slashed the projected resale values of all 2009 Chryslers and most of GM's lineup by about 5% compared to 2008 projections.

This means someone buying a 2009 Chrysler or 2009 GM will have their car depreciate quicker. For example, the 3 year projected resale value of a 2008 Chrysler was 42.9%. For a 2009 model, the 3 year projected resale value is only 36.4%. That means a 3 year old 2009 Chrylser will be worth only 36.4% of the original MSRP price. Most car brands retain about a 50% resale value after 3 years.

Most car buyers don't really think about resale value, but this is important if you intend to sell the car within 5 years or so. The reason ALG slashed the residual is due to the uncertainty of whether GM and Chrysler are even going to survive.

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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