Polk speculates about effect of government incentives on 2009 car sales
In light of the automaker benefits and car buyer assistance in the recently-passed stimulus package, analysts at R. L. Polk & Co. estimate there will be an average rebate of $330 for every vehicle sold this year. By allowing buyers to deduct the sales tax from a new vehicle purchase from their income taxes, Polks sees a sales increase of 94,000 units this year.
By contrast, the rebate provision in the original stimulus bill allowed buyers to deduct the interest on their car loans from their income taxes, in addition to the sales tax. Polk predicted the average rebate in that case would have been $1,250, and the U.S. light vehicle unit sales would increase by 359,000 units this year.
That would still only be a tiny bump in national volume when compared to Hyundai's gains due to its Hyundai Assurance Program: the Korean marque saw January sales rise by 14%, compared to a 37% drop suffered by the industry overall. And commenting on Germany's €2,500 rebate for people buying new cars, Polk figured the country could see 200,000 more cars sold this year, with smaller cars taking up much of that volume.
[Source: Polk]
_opt_thumbnail.jpg)
_thumbnail.jpg "2011 Audi A8: Live from Miami")
Reader Comments (Page 1 of 2)
JasonD 8:19AM (2/17/2009)
Wow, $330 off a new car. Let me rush out and buy today.
/sarcasm
Reply
notYou 10:12AM (2/17/2009)
What part of HOPE and CHANGE didn't you understand?
/nosarcasm
James 11:13AM (2/17/2009)
$330!! Ka-ching!! (sound of loose...CHANGE)
Jei 12:01PM (2/17/2009)
If the average rebate/tax write-off will be $330, what's the expected cost of the average car in the US? $5000? What new car could be bought for that much?
Buying an average midsized (moderately equipped) car/SUV in Ohio may cost near $25,000 where the sales tax in Ohio ranges from 6-8%. If I purchased a new car for $25k in an area with 7% sales tax, the cost of tax would be $1750. I wouldn't complain about that amount...it could go toward 3-4 months of car payments or 1 lump sum to shorten the loan term period.
Gary 8:25AM (2/17/2009)
Yea, I hear you there. I had looked at a Ford a few weeks back during the employee pricing, but couldnt get out of my existing lease without eating a lot of money for another month or so. The dealer is still calling me and telling me about the great deals they have, but the cars are a few thousand more than they were two weeks ago. No thanks.
Reply
Dude 8:35AM (2/17/2009)
Considering that we'll have to pay it all back and more in two years when Bush's tax cuts expire, I think I'll just save my money.
The Dems always leave that little tidbit out.
Reply
Corey W. 9:02AM (2/17/2009)
Wow.... good for you... Although, sucks for me, I wasn't rich enough to really benefit from those tax cuts....
Dude 9:16AM (2/17/2009)
Everyone who paid taxes got a tax cut under Bush.
In fact, under Bush, more people paid no income tax at all because of the readjusted tax brackets. The whole "tax cuts for the rich" bullsh*t was made up by the Dems to create class envy. Since everyone got the same percentage cut, those who paid more taxes got a bigger cut. That's just simple math.
BTW, I wasn't making much then either, but that tax cut was just the break I needed to get a better car.
notYou 10:13AM (2/17/2009)
Corey W.: "Wow.... good for you... Although, sucks for me, I wasn't rich enough to really benefit from those tax cuts...."
Meaning: You didn't pay enough taxes to earn the benefit of the government allowing you to keep a little more of your own money.
i.e. Tax Cuts = People Keep What They Earn.
So, Translation: "Wow... good for you... Although, sucks for me, I didn't get any of other people's money."
Call me crying when you're earning enough to matter and getting taxed to death to support a bunch of "Corey W."s
notYou 1:13PM (2/17/2009)
Corey W: Explaining tax code and how it effected me individually, to your simple @ss, would be like explaining discrete geometry to a toddler.
Maybe if you understood the difference between "affected" and "effected", your earnings situation (and, therefore, your tax situation) might be improved to the point where you could participate in these conversations like a grown up.
Oh, it might help your understanding of geometry too.
Cheers!
Corey W. 2:24PM (2/17/2009)
You got nerve talking about repsponding like a "grown up"...look at my response to "Dude", in no way did I insult him or his tax bracket, it was you that started the negative route. From your other post it's obvious you have nothing better to do than to start trouble with others on this blog.
Get a life.... Cheers!!!
notYou 3:21PM (2/17/2009)
Corey: "...in no way did I insult him or his tax bracket, it was you that started the negative route."
Pardon my initial exuberant response, but those of us who work our tails off are getting sick and tired of comments from people like you (and the Dems, and Obama, and Congress) that goes something like this:
Corey: "I wasn't rich enough to really benefit from those tax cuts..."
Know who's fault that is?
Yours. Go get some. And stop whining and playing indirect class warfare ("They're rich, we're not.")
While some people are born into wealth, like Paris Hilton, 96% of the rest of "the rich" are people who worked their collective tuck'usses off for every single penny they have.
It should be insulting to all Americans when someone whines that they "weren't rich enough". There is a whole world of opportunity out there, but for the Corey W.s of the world: Well [sigh] it's just too hard. So lets elect someone who will take from everyone else and gimme some of what they got!
* I'm not rich, not even close, but doing better every year working my tail end off not just at my day job but constantly improving my skills and my situation. I may never make it to the top, but I'm already leaps and bounds form where I was and I'll be leaps and bounds from here 10 years from now.
Good luck to you.
Corey W. 5:12PM (2/17/2009)
Ok, so you're starting to make up stuff and pulling crap from the bottom of the barrel you call intelligence. Your attempts at putting everybody into two groups, those that agree with you and those that are Dems/Liberal/Obama supporters...etc. It's about as obvious as your bias political views. If you look at your posts, you inject some sort of political rant into every topic, no matter what it is, then attack anyone that doesn't agree with you.....
Good luck??? I don't need luck, I worked to get where I'm at......
It's amazing how many people that post on here, who really don't give a crap about cars or the auto industry..... they just want to make trouble..... so sad!!
Evan 9:29AM (2/17/2009)
Allowing buyers to deduct the interest on their car loans from their income taxes would encourage people who can't really afford a new car to take on more debt, and encouraging consumers to take on too much debt is what caused the crisis in the first place.
Allowing buyers to deduct the sales tax from a new vehicle purchase from their income taxes should encourage people who can afford a new car outright to spend their money instead of hording it in the bank.
Reply
Kumar 9:36AM (2/17/2009)
Good point. It also levels the playing field between those that choose to pay cash and those that finance. It makes it about moving cars, not getting loans.
Polly Prissy Pants 9:33AM (2/17/2009)
"analysts at R. L. Polk & Co. estimate there will be an average rebate of $330 for every vehicle sold this year. By allowing buyers to deduct the sales tax from a new vehicle purchase from their income taxes, Polks sees a sales increase of 94,000 units this year."
This ia a great example of that fuzzy math MBA spreadsheet jockeys like to use that doesn't really apply to the real world. It's a great theory and I can understand how you got there, but in reality $330 isn't going to sell 100,000 cars that would otherwise rot on the lot.
Reply
John 10:58AM (2/17/2009)
Um, you could already deduct the sales tax paid on a vehicle from your taxes, so I'm not sure how you would deduct even more. It was part of the state sales tax deduction that's been around for years. I took it in 2007 when we bought a new car. You just have to have the documentation to be able to add it to the standard sales tax deduction estimate for your state.
Reply
David 9:58AM (2/17/2009)
Corey W.... if you were not "rich" enough to benefit from the Bush tax cuts, then you were not paying taxes. End of story. Maybe the reason you are not "rich enough" is because you need to GET A JOB... or two or three, like the rest of us who don't sit on our butts, complaining about what we don't have, but get out and WORK and MAKE THINGS HAPPEN FOR OURSELVES! Whew... ok... my blood pressure is back to normal again. Thank you.
Reply
jv2k 11:42AM (2/17/2009)
Enough of this "well they pay more" bull.
Even after they pay their larger taxes the rich still have more than enough money to live more comfortably than the rest of us.
jfa 9:59AM (2/17/2009)
The real stimulus would come when the US GOV. slaps money on the hood of a new car at the time of purchase rather than deducting the interest 1 year later. Who wants to wait 1 year to get their money back?
Reply