Auto Purchase Incentives Go Beyond Cash For Clunkers

As a result of the recent state of financial woes, shoppers have been holding back on anything considered a luxury like purchasing a new car. To help stimulate the over all bottom line, both the government and care manufacturers got creative with their incentive to buy programs to help generate much needed activity in this crucial financial sector.

Government incentive programs for the auto industry in 2009 include:

• Tax Deductions. Those who purchased vehicles after February 16, 2009 are able to write off the the cost of any sales and excise taxes incurred during the vehicle purchase.
• Cash for Clunkers. Until the money for the program ran out, the government offered consumers $3,500-$4,500 off of new car prices for trading in their less efficient vehicles for newer, efficient cars. The incentive was to reduce our reliance on oil and stimulate lagging auto sales.
• Hybrid Cars Tax Credit. Another government incentive program was offering consumers who purchased qualifying hybrid vehicles additional tax breaks. This program is capped to 60,000 vehicles per manufacturer to spread the incentive around. The dollar amount on this type of purchase ranged from $500 and $3,400 and although there may still be some available vehicles, some cars like the Prius have reached their allotted quota.

The incentive programs did not stop there. Car manufacturers and dealers have also gotten in on the act by offering consumers the following:

• Promotional Financing Rates. Only the most qualified borrowers can get reduced rates on auto financing which included 0.0% interest as well as options well below the conventional standard auto loan rate.
• Assurance Programs. Hyundai was the first manufacturer to offer this incentive to consumers. The program (for qualified buyers) allowed consumers who purchased a new vehicle to return the car if they lost their job.
• More Cash For Clunkers. In conjunction with the government stimulus program, many dealers offered consumers additional cash incentives for trading in their clunker

Led by the government’s cash for clunkers program, Alan Greenspan, the Federal Reserve’s ex-Chairman, said he has noticed a spur in consumer spending, confidence and activity. All the programs have been instrumental steps in building the groundwork necessary for an economic rebound.