More Tax Breaks Proposed to Prompt Car Shoppers to Buy

When you buy a car the sales tax and the interest on the loan may soon be deductible, the U.S. Senate decided yesterday.

Is this the catalyst that will open the floodgate for shoppers to return to the car lot? It's debatable. While a deduction of any kind is welcome, and might spur to action shoppers who are currently on the fence, it remains to be seen how much money this will actually save consumers.

When Maryland Democratic Senator Barbara Mikulski proposed the measure, as part of an auto industry stimulus plan, she said it would save a family $1,553 on a $25,000 car. But that projection might be a little too optimistic. For more information, and some sample savings calculations, see our news item in Straightline.

Meanwhile, car buyers can get unprecedented deals using Edmunds calculators which pull in all the numbers you need to negotiate a great deal. It's also important to review the car's True Market Value price and pay particular attention to incentives and rebates.  Finally, a visit to the "Predicted Price Trends" for TMV will show if the car's price is forecast to go up or down.

Posted by

Philip Reed February 4, 2009, 9:40 AM

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Car Buying, Car Loans and Financing

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car shoppers, Tax breaks, tax credit, tax deduction, U.S. Senate