• Feb 17, 2009
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 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]


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  • 25 Comments
      • 5 Years Ago
      "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.
      • 5 Years Ago
      Folks....Get off of Corey's back about this. It was because of the Bush administration's do nothing attitude that over 600,000 people do not have a job to even qualify for a loan albeit car, home....etc. It would have been nice to have had the bank scrutiny under the Bush administration that they are receiving now after the fact. So at least this new administration is trying what they can by doing something rather than nothing!!! No 330.00 dollars may not mean a great deal on the average 20+ thousand dollar car, it is something! They are also scrutinizing the banks for making it difficult for credit worthy people to obtain car loans after they have received financial help under the Bush administration. I have an SUV that I wanted to sell, but the truck is upside down in value. I can go to the dealership today and purchase the same vehicle new for 8 grand less, so I have to keep the vehicle instead of selling it to even break close to even! I'm having to finance my new 7 series Bimmer through a credit union instead of a bank even with me putting 50% down on the vehicle and a high credit score!
        • 5 Years Ago
        Proud to be... dude. How exactly did the Bush administration put 600,000 people out of work? Please explain in detail.

        The fact is, the "Community Reinvestment Act" (democrat bill) pressured banks into "affirmative-action lending" - a nicely package term for giving out loans to people who shouldn't and couldn't qualify. This is a classic case of "over regulation", not under. Then Bwaney Frank and other democrats (Chris Dodd of Countrywide fame maybe?) used "government-sponsored enterprises" Fannie Mae and Freddie Mac to buy up all the resulting subprime loans and repackaged them as "investment grade", which ultimately led to the mess in our banking system. Republicans failed to stop this insanity, but they did try. Ultimately they were defeated by liberals - including our now glorious messiah, Obama (one of the few things he actually DID in the senate and what a disaster that was) and there you have it. The democrat morons who created this mess are now running amok, trying to fix it by SPENDING MORE OF OUR MONEY on an over-porked spending bill that has little to nothing to do with stimulating and repairing our economy. Doubt it? The idiots in congress and the house that signed it didn't even have time to read the darn thing but still they just signed our lives (and more importantly, our children's lives) away! And if it was such an emergency that this bill get passed "Now" or else there would be economic Armageddon, as was preached by all those who pressured for it, then why has Obama sat on signing it for over 4+ days, just so he could make a media event about it in Denver? Pathetic. And also please tell me how your vehicle being upside down in your loan is the Bush administration's fault? Last time I checked, he and they did not force you to buy an SUV and sign a loan document.

        I understand your frustration, and the Bush administration was not error-free in any regard, but please get your facts straight and understand how we got here, rather that drinking the kool-aide fed to you by the mainstream media.
      • 5 Years Ago
      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.
      • 5 Years Ago
      Wow, $330 off a new car. Let me rush out and buy today.

      /sarcasm
        • 5 Years Ago
        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.
        • 5 Years Ago
        What part of HOPE and CHANGE didn't you understand?

        /nosarcasm
        • 5 Years Ago
        $330!! Ka-ching!! (sound of loose...CHANGE)
      • 5 Years Ago
      The stimulus bill is a F*ink joke. It is set to Stimulate the economy my a@@, The bill has soooo much pork its not even funny...Will all those Billions they should of given every tax payer on file a check for 30K watch how fast that money gets spent and watch how fast that economy jumps up again.
      • 5 Years Ago
      Tax cuts will just mean that the people that still have incomes will take the money they get refunded and squirrel it away in their bank accounts. We desperately need these people that are not on the edge to go out and buy new cars and new goods! That helps the dealers, the mechanics, the salesmen, the factory workers, the parts workers and all the support people it takes to keep all of that operational. Rebates are a direct stimulus because they make people want to spend 3/4 of the cost if it means they will save 1/4 of the cost. Tax cuts are indirect in that it assumes people take that money and spend it immediately (which they don't always do)...

      The past 8 years have been nothing but tax cuts. They haven't stimulated the economy or created a single job. They let the rich get richer and helped them outsource to China. The best way to get the economy going is to offer incentives to the people that have money to go out and buy a new car or other less vital goods and give the unemployed more money to buy the essentials like food and clothes. Getting people spending money is the solution to the problem.
      • 5 Years Ago
      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.
        • 5 Years Ago
        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.
      • 5 Years Ago
      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?
        • 5 Years Ago
        The same idiots who overpay their taxes every year and are overjoyed at the notion of getting a "refund!" of their own money (sigh).

        I can't tell you how many people think they net more money in that situation ("I'm getting $300!!! woohoo!") ... and that's just the way the Fed likes it.

      • 5 Years Ago
      You need to look at the entire plan, there is no "under Bush" ..there is a scheduled 10 year plan that was put in place, and since the current administration is going to let it complete, in 2010 ...you'll see the results of your simple math. Yes it easy to just call it "tax cuts for the rich"..... But if you look at the ENTIRE plan, by 2010 an estimated 52% percent of the cuts will benefit the top 1%.
      Yes, the rich pay more in taxes, yes EVERYONE did better under Bush Tax plan, the real question is...at the end of the day is who did better???

      Again, I'm glad it gave you a break, but it wasn't enough for me to write home about.

      And the Dems don't have to BS to make class envy, our ridiculous tax code does just fine...
        • 5 Years Ago
        In Reponse to #4.Dude
      • 5 Years Ago
      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.
      • 5 Years Ago
      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.
        • 5 Years Ago
        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.
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