Is NOW the time to buy a new car?
As a car buyer, you have to be a little bit giddy to be ready to buy at the present time. Almost every manufacturer’s numbers are abysmal, and credit is too tight. People are losing their homes as value drop, which means no home equity car financing. Everyone is miserable except the guy who has cash-in-hand at the dealership. You walk through a car dealer’s door right now with a brief case of one-hundred dollar bills, and the General Manager himself will become your new best friend.
And that’s part of the reason why now is a great time to buy a new car. But guess what. There are now two more reasons. First government intervention, and secondly, OEM subsidies.
After its initial demise last month, the U.S. Congress is back with a revised bill that some would call the “cash for clunkers” legislation. LeftLane News points out:
The Consumer Assistance to Recycle and Save bill, or CARS Act, the revised plan would offer up to $5,000 in rebates to owners willing to trade-in their old rides for a new set of wheels. To qualify, the ‘clunker’ must be at least eight-years old, the new vehicle must have a price tag under $35,000 and have better fuel economy numbers than the vehicle being traded in. According to Sutton, the new bill would cover about 60 percent of the vehicles on the road.
The CARS Act is also forward-thinking, with a $7,500 voucher set to take effect in 2010. That larger credit would be applicable to plug-in hybrid vehicles with a fuel economy rating of 100 mpg or better.
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One of the biggest criticisms of the last ‘Cash for Clunkers’ bill was that it favored the purchase of import vehicles. However, the new version of the bill alleviates that concern by offering an additional $1,000 rebate on vehicles assembled in the United States.
What is curious about this bill is the cap at $35,000. Only a couple of European manufacturers even sell a car in the US that would qualify. All employ Americans and all have American investors. So what’s the beef? It makes wonder just how many cars have better numbers than 8 years ago – such a calculation is critical for those that wish to buy the same car model! And who makes a 100mpg car anyway??
The second part of this story deals with an article from Edmund’s Michelle Krebs. Krebs points out that compared with buying a 1-year-old car, some new cars are actually cheaper!
Krebs gives several examples including the Audi A4, and the BMW 1, 3, 5, 6, M5, and M6 series. In the case of the 6-series convertible, a buyer would save $6,175 buying a new example over a one year old example! The Japanese are also examples of carmakers whose cars are more heavily discounted now than a year’s worth of depreciation would otherwise discount them.
Now is definitely a good time to shop!