- Should I buy a Chrysler or GM?
- Are rebates and deals available?
- Is government help available?
- Can I get financing?
- What models will be available?
- What if your dealership folds?
- Is my warranty backed?
- What if my dealer closes?
- What if I want to sell my car?
- What if my brand is discontinued?
- Will parts and service be available?
- Chrysler reduces dealers
- What does bankruptcy mean?
- Chrysler to delay 2010 models
- Chrysler and Fiat reliability
- Chrysler bankruptcy, Fiat merger
- GM closes 1,100 dealerships
- GM viability plan, Pontiac cut
- GM closes factories
- Saturn dealers closing
- ChryslerRestructuring.com
- GM.com
Is government help available?
The federal government has two key pieces of legislation that promise to help new-car buyers save money.
American Recovery and Reinvestment Act of 2009
This legislation, enacted on Feb. 17, 2009, allows people who buy new vehicles in 2009 to deduct associated taxes from their federal income taxes.
To qualify for the deductions, the vehicle must have been bought between Feb. 17 and Dec. 31, 2009. Buyers get to deduct the state and local motor-vehicle sales taxes on the car, and the motor vehicle excise tax, for vehicles sold for less than $49,500. For higher priced vehicles, you can deduct sales taxes on the first $49,500 of the car’s price.
The deductions are for any new passenger vehicle, light truck, motor home, and motorcycle (having a gross vehicle weight of no more than 8,500 pounds), regardless of model year. Used cars are not eligible. In addition, buyers must have a modified adjusted gross income of less than $135,000 if filing individually or $260,000 if filing jointly. But the deduction is phased out for individual filers with income between $125,000 and $135,000, and for joint filers with incomes between $250,000 and $260,000.
The deduction can be taken on your 2009 federal income tax return, regardless of whether you itemize other deductions.
"Cash for clunkers"
This legislation, also called fleet modernization, has not yet been signed into law, but similar versions of it are being considered by the Senate and House of Representatives. In essence it allows people to receive a voucher or credit of $3,500 to $4,500 for trading in an older gas guzzler for a new, more fuel-efficient vehicle. The money would go directly to the dealer and be applied to the new car.
In the version recently agreed on by the House Energy and Commerce Committee, car buyers can qualify by trading in a vehicle that gets 18 mpg or less (EPA combined) and buying a passenger car that gets at least 22 mpg or a light truck or SUV that gets at least 18 mpg.
They would receive a $3,500 voucher if they buy a new car that gets at least 4 mpg more than the trade-in car or a light truck or SUV that gets at least 2 mpg more. They’d get a $4,500 voucher for buying a new car that gets at least 10 mpg more or a light truck or SUV that gets at least 5 mpg more.
There are other requirements for heavier-duty trucks. See the following chart.
| Passenger car light-duty | Small truck | Large light-duty truck (6,000 – 8,500 pounds) |
|
|---|---|---|---|
| Minimum fuel economy for a new vehicle | 22 mpg (EPA combined) | 18 mpg (EPA combined) | 15 mpg (EPA combined) |
| $3,500 voucher | Mileage improvement of at least 4 mpg | Mileage improvement of at least 2 mpg | Mileage improvement of at least 1 mpg or trade-in of a work truck.* |
| $4,500 voucher | Mileage improvement of at least 10 mpg | Mileage improvement of at least 5 mpg | Mileage improvement of at least 2 mpg |
Some senators, however, say the House version doesn't provide enough of an environmental benefit and that they would like to see greater mpg improvements for car buyers to qualify for the vouchers.
Follow the Auto Crisis category on our Cars Blog for the latest updates.
To check EPA mileage ratings on vehicles back to 1985, go to www.fueleconomy.gov.
