By the numbers: new car tax deduction

Full story: WOOD-TV Grand Rapids and Michigan

The new tax deduction for new car purchases announced by President Obama Monday works by reducing your "taxable income," as far as the IRS is concerned.
Comments
1 - 20 of 21 Comments Last updated Mar 31, 2009
First Prev
of 2
Next Last
spike

Ada, MI

#1 Mar 30, 2009
peanuts
Broke in Michigan

Lansing, MI

#2 Mar 30, 2009
Agree. And you still have a monster monthly payment to deal with.
Sanity is overrated

United States

#3 Mar 30, 2009
This isn't an incentive, just like you said, peanuts. But then again, Obama has shown how little he really cares about the auto industry already
fed up

Waukegan, IL

#4 Mar 30, 2009
stupid! how about giving us who buy used and pay cash a break?? eh?? so the gov. is giving you a pat on the back for taking out a loan on a new car and making payments?? go more in debt??? so you can pay interest for those dumb ass ceo's to fly in there corportate jets to another "help me bail me out " meeting??
RogerD

United States

#5 Mar 31, 2009
Chump change! When is the government going to help the people that have been making their mortgage and credit card payments on time? I feel like we are being penalized for being responsible.

Since: Mar 09

Saugatuck, Michigan

#6 Mar 31, 2009
Like the $600 per person, what is that going to do? A few extra bucks to spend isn't going to get our economy. I agree we are being penalized for paying our bills. washington, are you listening?

“The state with the other UofM.”

Since: Sep 08

Boston, MA

#7 Mar 31, 2009
Wasn't it back in 1986 or 1987 that we had this in Michigan? I don't recall exactly which year, but new car taxes were deductable way back then. I recall talking with a car salesman who said that they were selling cars faster than expected during December of that year due to it being the last month that qualifieed for taxes.

“Go MSU Spartans!”

Since: Oct 08

Kalamazoo, MI

#8 Mar 31, 2009
I'll just keep fixing my existing cars.
Ron4231

Sidney, MI

#9 Mar 31, 2009
Correct me if i'm wrong, but I think you have always been able to deduct state and local taxes on schedule A (if you itemize deductions which most people who have a home loan do). So big deal, you don't have to pay (federal income)tax on the money you used to pay (michigan income) taxes with.
Another sceme to transfer wealth to banks and big companies that have blown it.
Don't fall for it. When will we learn that we can't spend ourselves out of debt?
Dick Cunningham

Muskegon, MI

#10 Mar 31, 2009
Why in the hell would anybody having $ 40,000 of taxable income buy a $ 46,000 vehicle? Isn't that how we got in this mess?

“Dude, Where's my car?”

Since: Jan 08

Location hidden

#11 Mar 31, 2009
I was going to comment on this story but comments 8,9 & 10 hit the nail on the head. Great posts!
Hold yer horses

Alto, MI

#12 Mar 31, 2009
State and local income taxes have always been deductible but not sales tax on major purchases.
Ron4231 wrote:
Correct me if i'm wrong, but I think you have always been able to deduct state and local taxes on schedule A (if you itemize deductions which most people who have a home loan do). So big deal, you don't have to pay (federal income)tax on the money you used to pay (michigan income) taxes with.
Another sceme to transfer wealth to banks and big companies that have blown it.
Don't fall for it. When will we learn that we can't spend ourselves out of debt?
Hold yer horses

Alto, MI

#13 Mar 31, 2009
This has nothing to do with buying a car on credit as there is no incentive to borrow the funds; the benefit is tied to the purchase rather than how it's financed (cash or credit). Those paying cash receive the same deduction.
fed up wrote:
stupid! how about giving us who buy used and pay cash a break?? eh?? so the gov. is giving you a pat on the back for taking out a loan on a new car and making payments?? go more in debt??? so you can pay interest for those dumb **** ceo's to fly in there corportate jets to another "help me bail me out " meeting??
Hold yer horses

Alto, MI

#14 Mar 31, 2009
My 1998 is up to 213,000 miles and still ticking.
spartanman wrote:
I'll just keep fixing my existing cars.
Bighorse

United States

#15 Mar 31, 2009
If Obama really wants to save the domestic auto industry, instead of giving bailouts to the auto companies or instead of passing out tons of money to bankers, give every legal driver who wants a new vehicle the price of that vehicle and let us buy it. It won't cost the government any more than these bailouts already have and the stimulative effect on the economy would be tremendous.

Since: Oct 08

Grand Rapids, MI

#16 Mar 31, 2009
Are you talking about the new voucher program here?

A bill in the House, sponsored by Representative Betty Sutton of Ohio, would do just that, offering incentives to owners who replace cars built before the 2001 model year.

Ms. Sutton’s measure would give those trading in an old car a $4,000 voucher that could be used to buy a new car that was assembled in the United States and has a fuel efficiency rating of 27 miles per gallon. A car assembled elsewhere in North America would have to get 30 miles per gallon to qualify for the $4,000. And cars that are both assembled in the United States and rated at 30 miles per gallon would fetch a $5,000 voucher.

A similar bill in the Senate would provide slightly less generous subsidies, and is aimed more at protecting the environment than spurring car sales.

The Senate measure would offer up to $4,500 for the trade-in of gas guzzlers up to seven years old,$3,000 for cars that are eight to 10 years old and $2,500 for cars older than that. The Senate bill is not limited to cars assembled in North America.

These are "vouchers" not tax credits.

“Dude, Where's my car?”

Since: Jan 08

Location hidden

#17 Mar 31, 2009
My parents just purchased a new car last week. They are 70 years old, retired and this is the first new car they have purchased in their lives. They have the cash of course (I was brought up to save for things I needed and wanted and to pay cash for them). However, with the 0$ interest rates they are now offering my parents decided to take the 36 months loan. It's free money. They put $15,000.00 into an interest bearing checking account (5% at LMCU) so they are making money on the loan. Just the interest they will earn on that money will deduct approximately $1,800.00. Plus the will take the new car incentives on their taxes next year.

My point is, when did it become so impossible for people to save their money and pay cash for a vehicle, new or used? When I was growing up and as a young adult a car loan was unheard of. You can use your money one of two ways. You can make your money in your favor (getting interest on it) or use your money to lose money (paying interest on a loan). I'm not entirely certain that this whole economic slow-down is an entirely bad thing. Yes, I know people are hurting and some losing homes etc. but if the final outcome is to change us back into a nation of savers instead of debtors, we will all be better off in the long run.

The one bill or payment you never have to worry about paying is the one that you don't have...
Businessminded

United States

#18 Mar 31, 2009
spartanman wrote:
I'll just keep fixing my existing cars.
Yep! It smells alot like 1978ish....Nobody was buying new cars AND the used car market dried up because NOBODY was buying new cars. The only thing missing is the long gas lines.......
Bummed

Saugatuck, MI

#19 Mar 31, 2009
I bought a new car in January, so I guess I am screwed because I didn't buy it after Feb. 16th. I think the incentive should start at Jan. 1, 2009. What significance does Feb. 16 have? It seems like starting with the fiscal year makes more sense to me.
Businessminded

United States

#20 Mar 31, 2009
Bummed wrote:
I bought a new car in January, so I guess I am screwed because I didn't buy it after Feb. 16th. I think the incentive should start at Jan. 1, 2009. What significance does Feb. 16 have? It seems like starting with the fiscal year makes more sense to me.
And that makes an interesting point. I wonder how many people won't buy a car right now because they're waiting for the best incentives. We seem to be creating an environment of 'incentives' for these major purchases.$8,000 for a new home buyer seems REALLY excessive to me. But what happens when they go away? Will people stop buying? Will they be like some consumers 'waiting for the next sale'?

Tell me when this thread is updated: (Registration is not required)

Add to my Tracker Send me an email

First Prev
of 2
Next Last

Add your comments below

Characters left: 4000

Please note by submitting this form you acknowledge that you have read the Terms of Service and the comment you are posting is in compliance with such terms. Be polite. Inappropriate posts may be removed by the moderator. Send us your feedback.

Grand Rapids Discussions

Title Updated Last By Comments
Movie Theater Demolished 17 min Go Blue Forever 13
'We Don't Have a Strategy' to Fight ISIS t 2 hr Phil 14
Old things and places we remember from the Gran... (Feb '09) 3 hr JimGR 937
A long-time cafe in the East Hills are may close 11 hr Dominic 1
College football roundup: Ohio State starts the... (Sep '13) 23 hr Go Blue Forever 1,328
Meet The Press Sat Go Blue Forever 3
why war with isis? Fri Colonel Sanders 15
•••
•••
•••

Grand Rapids Jobs

•••
Enter and win $5000
•••
•••

Grand Rapids People Search

Addresses and phone numbers for FREE

•••

Grand Rapids News, Events & Info

Click for news, events and info in Grand Rapids
•••

Personal Finance

Mortgages [ See current mortgage rates ]
•••