March 4, 2009

February Car Sales at 40 Year Low

Car sales just keep getting worse as the recession deepens. Sales in February were down by more than 40% compared to the same time last year. GM was the biggest loser with a drop of 55% while Ford sales were down 48%. Toyota wasn't far behind with a 40% drop.

These are just horrendous sales figures, especially when you consider the increase in incentives lately. Car manufacturers look like they're starting to cut back on incentives since they don't seem to be working. But desperate dealers will still be offering huge discounts to move the inventory that's piling up.

New Tax Credits for Plug-In Electric Cars

As part of the new stimulus package, buyers of plug-in electric cars will get as much as $7,500 in tax credits. The new law will allow each manufacturer to sell up to 200,000 plug-in electric vehicles before the tax credit is phased out. GM, Ford, Toyota, Nissan, Honda and Chrysler should all have cars that qualify for the program.

Here are the requirements to be eligible for the tax credit:

  • Car must weigh less than 14,000 lbs.
  • Must be powered "to a significant extent" by a battery-powered electric motor
  • The battery capacity must be at least 4 kilowatt-hours. (This will give the buyer a base credit of $2,500. Each additional kilowatt-hour over 5 kilowatt-hours will add a credit of $417 up to a maximum of $5,000 in tax credits)
  • Must be able to be recharged from an external source

California Passes Tax and DMV Fee Increase

People living in California will have to pay higher fees when buying a car thanks to a new tax increase coupled with an increase in DMV fees. Beginning April 1, 2009, the cost of buying a new car will increase 1% due to the increase in sales tax. Furthermore, California DMV fees will increase .65% to 1.15% starting May 19, 2009.

If you live in California and you're thinking of buying a car in the next couple of weeks, make sure you do it before April 1st.

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

Incentives Watch:

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