Teaser Post: Tax Break for New Car Buyers!

February 9, 2009

Before I tell you about this, I must preface it by saying that this has not passed yet. But when and if it does, I will post it so please keep checking back!

It’s no secret that car sales are down. Most consumers just can’t afford to buy a new car. Mechanics are doing a great business now since everyone is getting their current cars fixed instead of buying a new one. That being said, part of the new $900 billion plus economic stimulus bill, if passed, will offer a huge incentive to consumers to go and buy a new car.

Here’s how it would work: New car buyers would be able to claim an income tax deduction for the cost of the automobile’s sales tax and interest payments on the car loan. It would apply to the first $49,500 in the price of a new car purchased between November 12, 2008 and December 31, 2009. Individuals with annual incomes of up to $125,000 and couples earning no more than $250,000 would qualify, even if they don’t normally itemize deductions. This could mean, over the life of a 5-year auto loan, savings in the thousands.

Let’s hope this passes! It would definitely stimulate the auto industry, as well as the economy as a whole.  The Senate has already voted in favor of it, but it still needs to be approved as part of the entire bill. Stay tuned – as soon as I hear if this has passed, I’ll post it to the blog.

Questions or Comments? E-mail me at blogger@matadorsmoneymatters.com.

Posted in Loans