As part of the economic stimulus plan that brought us Cash for Clunkers there is still some advantages left for new car buyers. Although you can not receive a Cash for Clunkers rebate you can still receive a tax break if you buy a car. If you buy a car now you can deduct state, local and excise taxes paid on up to $49,500 of your new vehicle’s purchase price. Keep in mind that if you have an adjusted income of $125,000 or more ($250,000 if filing jointly) your ability to take advantage of this program is limited.
Sure it’s a gimmick. Sure it’s nothing more than a band-aid on a gushing wound. Sure it screams desperate. But I like it. It is bold and it shows that GM is a corporation willing to put their money where their mouth is. When the program is officially announced I will give you a game plan and a full evaluation. But what I like best about this program is that there are not any real restrictions or loop holes. It looks like this is a company that really believes that they are selling some of the best vehicles on the market.
There is a ton of speculation concerning GM and whether they will file for bankruptcy. In my opinion it is going to happen and it is the only way the company can survive. All early indications are that when they do file for bankruptcy they will do so in New York. Everything seems to be in place to file in New York even though they are headquarters are in Detroit. This creates a problem. Right now, as the company is structured they would have to declare bankruptcy in either Michigan or Delaware. But there is one path available for them to declare in New York, its Chevy-Saturn of Harlem. You see, Chevy-Saturn of Harlem is one of the few factory owned dealerships. If Chevy-Saturn of Harlem declares bankruptcy it would occur in New York and create the path necessary for GM to also use the New York courts for their bankruptcy proceedings. There is a precedent for this, when Eastern Airlines went in bankruptcy it was done in New York even though the company was headquartered in Miami Florida. They were able to use the NY courts because a small subsidiary of Eastern Airlines headquartered in New York preceded Eastern into bankruptcy court.
So, for the people who are watching GM and trying to figure out if they will declare bankruptcy watch Chevy-Saturn of Harlem, if they go into bankruptcy you can bet that GM will follow. Now if you are shopping for a car, do not let GM going into bankruptcy scare you. This will allow the company to emerge a better and more viable company.
If you are shopping for a car today that is an important question you need to ask yourself, can you buy an American car with confidence? Everyone is familiar with the major problems facing GM, Chrysler and to a lesser degree Ford, but what about the little issues? For instance, if you buy a car and the company goes out of business: how long will you be able to get parts, what type of warranty will it have and who will provide the work, how will it affect my car’s value?
All valid questions you need to ask. Plus you have to wonder if the people building your car are distracted by their work situation, disgruntled and looking for revenge, or just too preoccupied by the whole situation to do a good job. I am not accusing anyone of not doing a good job building a car, but you do have to wonder! When you add it all up, the government and these car companies have to solve this problem quickly or let the economic forces dictate how these companies proceed because I’m afraid too many people consider these companies to be in ‘nowhere land’.
I have touted the virtues of CarFax on this blog for a long time. It is a great service for anyone buying a used car. Unfortunately, some people consider it the gospel. When you are buying a used car you must factor in the chance that the vehicle could have mechanical problems that are not reflected on a CarFax report.
For $30 a CarFax report is the best insurance a used car shopper can have. CarFax gathers information from over 22,000 sources and they have saved countless used car shoppers time, money and heart-ache, but nothing is perfect. If you are shopping for a used car get a CarFax report, but you also need to give the car a good look over yourself and it would make a lot of sense to have a mechanic also inspect the car. When you combine a CarFax report with a good mechanic’s evaluation you’ve done everything possible to ensure that your next used car provides you with many miles of trouble-free transportation
I recently read a story about a car dealership in Albuquerque, NM, Zangara Dodge and the owner of this dealership was described as running a car dealer ‘Ponzi Scheme’. The New Mexico Attorney General is collecting information to attempt to convict Ken Zanaga, Zangara Dodge’s owner. His lots are empty and I doubt if he will ever be able to sell cars again, but the full extent of the damage he has caused is still not known.
The ‘Ponzi Scheme’ Mr. Zangara was involved in is the age-old dealer scam of not paying off a customer’s trade-in. Regular readers of this blog know that this is a dealer scam that I have begged you to be wary of for a long, long time. Now that it may become known as the auto dealer ponzi scheme I hope people will learn about this common scam and be smart enough to make sure that their trade-in’s bank is paid off after they buy a car.
I recently read about a car dealership in Denison, TX , Hoyte Dodge who had about 100 cars damaged in a hail storm. The dealership will probably receive a great insurance check for the damage. This makes these cars a GREAT buy as long as you, the customer know that the dealership needs to significantly discount these cars!
As our government considers another bailout for GM and Chrysler it is understandable that so many people are upset. Both companies are in their current situations due to decades of mismanagement and why should anyone feel sorry for overpaid corporate stooges. I agree.
But there are people around the country, working in car dealerships who are losing their jobs and you should feel for these people. In 2009 hundreds of car dealerships, many of them domestic dealerships, will close their doors putting a lot of hard-working people on the unemployment line. These are the people you should feel sorry for, not the corporate big-wigs, not the dealer principles, but the porters, mechanics, lot guys, hardworking people who will often lose their jobs with little or no advanced notice.
It’s the last day of March and there is a bit of optimism in the air! Car dealers who have weathered the tough 6 months in anyone’s memory have a bit of a bounce in their step because for many March will be the best month of the year. Sure there are still a plethora of potential problems in front of a car dealer, especially if they sell a domestic brand, but it sure is nice to see the needle moving up!
This makes today an outstanding time to buy a car. If you are negotiating for a car now, push hard TODAY for your price and you stand an excellent chance to get it!
Attention hybrid shoppers, March 31, 2009 marks your last chance to take advantage of the $3,400 tax credit the government offers. Starting April 1, 2009 and until the end of September the hybrid tax credit is cut in half (only $1,700). Then it is cut in half again until the end of March 2010. So if you are thinking about buying a hybrid NOW is the time!