Historically, the final couple of weeks of the year are a great time to buy a new car. It’s typically a slow time for auto dealers as shoppers turn their attention to holiday activities and gift shopping. That diminished foot traffic is especially painful for dealers who have already seen annual sales reach their lowest levels in decades during 2009.
Automakers and dealers are anxious to boost their fourth quarter sales figures, and many are offering thousands of dollars in incentives on 2009 and 2010 models. Domestic automakers are especially motivated.
Some notable models offering thousands of dollars in customer cash rebates are the GMC Yukon and Sierra, Lincoln Navigator, Cadillac Escalade, Chrysler 300 and PT Cruiser and virtually every Buick model. Even Ford Motor Company, which reported a third-quarter profit and projects positive sale for the current quarter, is dealing on it F-Series trucks and Escape Sports Utility Vehicle.
There are also dealer incentives available on a handful of 2010 models. Automakers offer these incentives to their dealers. Sometimes dealers will offer equivalent discounts to their customers. Other times the buyer may have to request the discount. Chrysler is offer dealer incentives on its PT Cruiser. Infinity is also offering dealer incentives on its EX35, QX56, M35 and M45. The Land Rover LR2 and Range Rover and Volkswagen Routan have dealer incentives available as do all Volvo models. You’ll find a current list of all available dealer incentives on the Kelly Blue Book and Edmunds Web sites.
There are about two dozen 2009 model year cars and trucks offering discounts of $4,000 or more. However, before deciding on a year-end close-out model instead of next year’s model, ask yourself a few questions. How long do you intend to keep your new purchase before selling or trading it in? How many miles do you typically drive in a year? How does the current-year model compare with the 2010 model? Are there significant upgrades available in the 2010 model?
Among the great deals available on 2009 models are rebates of $4,000 on the Buick LaCrosse, and $5,000 on the Mazda RX-8 and Nissan Titan pickup. If you’re in the market for a Cadillac, now is a great time to buy. GM is offering rebates of $5,000 on its popular CTS-V and $10,000 on the Escalade and XLR.
Most automakers have set deadlines of either December 31, 2009 or January 4, 2010 for their cash-back rebate programs, but these deadlines are subject to change depending on the success of the campaigns and their year-end sales totals.
By purchasing your new car before the end of the year, you can save even more come tax time.
Individual filers with adjusted gross incomes of $125,000 or less and joint filers with combined adjusted gross incomes of $250,000 qualify for deductions in their federal income taxes as well as state and local taxes due on up to $49,500 of their new vehicle’s purchase price. The deduction can be taken even if you don’t itemize your return.
If your state does not have a sales tax, you may deduct other state and local taxes and fees provided the deduction is based on the sales price of the vehicle.
According to industry experts, you should avoid shopping on weekends when dealer showrooms see heavier foot traffic. They suggest shopping on December 21, 24, 28 or 31 in order to take advantage of additional discounts ranging from 6.9% to 7.25%. These discounts are in addition to all other applicable rebates and incentives.