While the government's Car Allowance Rebate System, or CARS, popularly known as "cash for clunkers," has spurred new car sales in the past week, it's not the only way to save money on a new car.
There are currently plenty of ways to get into a new set of wheels for the least amount of money possible. And, if you trade your vehicle under the CARS program, all of these discounts can be applied in addition to your CARS credit.
Among the domestic brands, Chrysler, which includes Dodge and Jeep brands, is offering cash rebates of up to $4,500 on all its models. Ford, which includes Lincoln and Mercury brands, also has rebates on many models ranging from $500 to $3,000, including $3,000 on some Mustang models. Many General Motors vehicles also have rebates of up to $4,500, including $1,000 on the Chevrolet Malibu Hybrid, $2,000 on the Chevrolet Tahoe Hybrid, $2,750 on the Saturn Aura and $4,500 on the Cadillac XLR.
Among the import automakers, Kia is offering rebates of up to $3,500, including $2,000 on its Sorento, Sedona and Borrego. On the Borrego, Kia also has an extra $1,000 "competitor bonus" applied to deals with consumers who currently own a competing vehicle.
Nissan has rebates of up to $5,000, including $2,500 on its 350Z, $3,000 on the Quest minivan, and $5,000 on the Armada SUV and Titan pickup. Consumers can get cash rebates of up to $3,200 on Subarus, including up to $3,000 on Outback models and $3,200 on Tribecas. Toyota is offering cash rebates of up to $3,000 as well, including $1,500 on all gasoline-only Camrys, $2,500 on Corolla S and XRS models and $3,000 on Tundra pickups.
|Chrysler||Dodge, Jeep||up to $4,500|
|Ford, Lincoln, Mercury||Multiple models, including Mustang||$500 to $3,000|
|General Motors||Chevrolet Malibu Hybrid||$1,000|
|Chevrolet Tahoe Hybrid||$2,000|
|Borrego||$2,000 plus $1,000 competitor bonus|
|Armada SUV, Titan pickup||$5,000|
|Toyota||Camry (gasoline only)||$1,500|
|Corolla S and XRS||$2,500|
Rebate information as of Aug. 3, 2009
Many automakers offer "loyalty" bonuses to those who buy or lease the same make of car or truck they now drive. Some new-car buyers also can qualify for other rebates in addition to manufacturer's cash rebates because of their affiliation with an employer, credit union, university, or the government or military. Purchasers can combine and deduct all of the rebates they qualify for from the purchase price.
Many hybrid vehicles still qualify for a federal income tax deduction under the Alternative Motor Vehicle Credit that began in 2006. The Energy Policy Act of 2005 states that this credit phases out based on each automaker's sales of these vehicles. While popular hybrids such as the Toyota Prius no longer qualify for a deduction, many new hybrids and clean diesel vehicles offer tax credits of up to $3,000. For example, the Saturn VUE and Aura hybrids currently have a $1,550 tax credit in addition to the $1,500 cash rebate offered from the manufacturer, while the Nissan Altima Hybrid has a $3,000 tax credit available as well as a $3,250 manufacturer's rebate. Clean diesel cars from Volkswagen and Mercedes-Benz have credits ranging from $900 to $1,800, depending on the model.
Federal tax deductionMany new car buyers will also qualify for a federal income tax deduction on state and local taxes paid on the purchase of a new vehicle. Buyers who have an adjusted gross income of less than $125,000 for individuals and $250,000 for joint filers can deduct the sales tax on the first $49,500 of the vehicle's purchase price. The taxpayer gets that break, even if he or she does not itemize deductions. The deduction is phased out with filers who have higher adjusted gross incomes.
Taxpayers in states with no sales tax may deduct other fees or taxes imposed by the state or local government, as long as they are based on the vehicle's sales price or as a per vehicle fee. Only new vehicles purchased between Feb. 1, 2009 and Dec. 31, 2009, qualify. The amount saved varies widely depending on the buyer's taxable income, state and local sales taxes, and the vehicle purchase price, but it could easily translate to a tax deduction of several hundred dollars for many Americans.
While all rebates mentioned in this article were accurate at the time of publication, consumers should always consult automaker Web sites to check for current incentives, as they can change at any time. Another useful source to view rebate offers from multiple automakers simultaneously is the New Car Incentives and Rebates page at Edmunds.com.
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