New car?

[Buck268]

Well, I've heard that with this new economic package they are introducing a significant tax credit with the purchase of a new vehicle... Combine that with the deals available and it may just be time to scrunge together the money for a car which may actually be reliable (and under 15 years old!)...

Basically, I'm curious if anybody knows about this tax incentive (or other such oppertunities)? I'm undertaking a google search as we speak, but first-hand knowledge is always of great use! :thumbup:

 

[xdshooter]

I heard on the news last night that any sales tax paid on a new vehicle will be tax deductible. That is, if the package passes in its current form.

 

[orthogonal1]

I don't know.

Higher insurance, higher yearly property tax, repair costs, higher "parking" tax (for we lucky people), etc.


I don't think sales tax makes much of a dent in the costs.

 

[Rupestris]

I don't know.

Higher insurance, higher yearly property tax, repair costs, higher "parking" tax (for we lucky people), etc.

I don't think sales tax makes much of a dent in the costs.

Right. As soon as the government puts an incentive out there to boost car sales, the banks will stop offering 0% financing and Mfgr's will cut the rebates figuring the feds can take the loss instead of them.

 

[DaveH]

you get a line item on your taxes that allow you to deduct state/local/excise tax. So I believe you wouldn't actually see any money, just less taxes.

 

[NeonLight]

I love buying new cars, I've averaged a new car every year and a half for the last 8 years, but don't confuse a new car with saving money in the long run, or thinking the car will be more reliable just because it is new. The 2001 Mustang and the 1990 Mazda Miata I bought in 2006 have been virtually as trouble-free as most of the new cars I've bought. I had one new car that had zero issues in 100,000+ miles, but bought the same make and model five years later and had it back to the dealer for warranty work 3 or 4 times in two years.

New cars have a warranty, but repeat trips to the dealer for warranty work can be a real pain. New cars usually cost more to insure, cost more up front (and/or in monthly payments), and often aren't that much more reliable than a comparable model that is 2-4 years old and costs 25-35% less. IIRC the part of the stimulus plan that applies to new car purchases allows the sales tax you pay on a new car to be deducted from your taxes. For me I'd be able to deduct about $2000 on a $30k mile car. Nice, but not enough to cause me to buy a car if I wasn't planning on it already, and I probably won't take advantage of it as I have five cars already.

 

[Rupestris]

I love buying new cars, I've averaged a new car every year and a half for the last 8 years,

You have my respect. Thanks for keeping the automotive industry rolling. I wish I could swing the payments.

One thing that gets on my nerves is the folks that cry "buy american" yet buy one used car every five or six years.

I lease for my wife every two years because she puts less than 12K miles /year on her cars. I tend to buy a car and drive it 'til the wheels fall off. I'm driving an '01 saturn right now but the new Suzuki Equator (Nissan Frontier) is looking pretty tempting.

 

[jdm61]

I would highly recommend looking at one of the certified pre-owned cars from one of the German companies. I'm not sure what your price range is, but I was by the BMW dealer and they were selling a two year old 335i with very low miles for as much as $12,000 less than sticker on a new one ($32,000 vs, $45,000+)and offering .9% financing. That included there balance of the bumper to bumper 50,000 mile warranty including all regular service for free and a slightly less comprehensive warranty for up to 100,000 miles. They had older modle 325's with the same warranty for as low as $19000. I have a 2001 325i that I bought as a certified car in 2003 and it just rolled over to 150,000 miles and I didn't have to do any kind of major work on it until it had over 140,000!!! If a BMW is too rich for your blood, I would say go look at a VW Jetta or maybe a Passat. I had a 99 Passat, which was the first year of the newer ones and I put 90,000 on it before I traded in for the BMW.

 

[CarpScot]

you get a line item on your taxes that allow you to deduct state/local/excise tax. So I believe you wouldn't actually see any money, just less taxes.

I wonder how this would work in states like Oregon and Montana that do not have a sales tax?

 

[orthogonal1]

I would highly recommend looking at one of the certified pre-owned cars from one of the German companies... I traded in for the BMW.

BMW - $900 cost to replace a transmission gasket gets to me, though. Dealer cost, that is; but I did it for rather less and still made a good profit.

 

[orthogonal1]

you get a line item on your taxes that allow you to deduct state/local/excise tax. So I believe you wouldn't actually see any money, just less taxes.

The deduction doesn't even come close. It is akin to the education interest deduction - of no use in my tax bracket.

 

[jdm61]

BMW - $900 cost to replace a transmission gasket gets to me, though. Dealer cost, that is; but I did it for rather less and still made a good profit.

Yeah, but the certified warranty takes care of that until you have VERY high mileage on the car. The good news is that if you take care of it, you can still sell the thing down the road for decent money because there is always some 20-something person who would rather be stylin' in a high mileage Bimmer or Benz than slumming in a relatively new Kia. My little car has 150,000 miles and still has a book value of somewhere around $8000. Not bad considering I only paid $22,000 for it 6 years ago.

 

[Buck268]

Interesting perspectives, going to have to keep my ears open and see what I can see. All I know is this car doesn't have much longer in it.