With debate ongoing over how (and whether) to save the U.S. auto industry from failure, a new proposal has emerged: help Americans buy new cars.
Senator Barbara Mikulski (D-Md.) is behind the proposal. The Baltimore Sun explains, "Under a bill pitched today by Sen. Barbara Mikulski, consumers will get a tax break if they buy a new passenger vehicle through the end of the year -- a proposal intended to get Americans into auto showrooms to buy cars in the face of an economic slowdown." The tax break she proposes would be temporary and allow consumers to deduct the sales tax, fees and interest paid on new vehicles purchased before Dec. 31, 2008. To be covered under the plan, a vehicle would have to cost less than $49,500. Individuals earning over $125,000 per year, or families earning over $250,000, would not be eligible.
Bloomberg reports that Senator Mikulski plans to introduce the legislation on November 17.
While the plan is designed to assist troubled U.S. automakers, the Sun notes, "The tax breaks would have to be applied to all automobile manufacturers, including foreign companies, because of international trade regulations."
Kicking Tires explains, "According to the senator, a family would save $1,553 on a $25,000 car under the plan."
Autoblog comments, "Nobody is really going to complain about getting a tax break, but it seems that buyers have already shown that they're wary, even with fantastic deals to be had."
The interest deduction may be particularly meaningless, with more than a third of the cars on the market today now available with interest-free loans. But it might make it more enticing for car shoppers to sign up for longer, interest-bearing loans with lower monthly payments, accept a rebate from the automakers and apply that money toward a down payment. If you're in the market, the proposal bears watching. We'll keep you posted as the legislation moves forward.
Regardless of whether Mikulski's plan succeeds, there are deep discounts and financing deals available on a huge selection of cars right now. Research the best car deals for November with U.S. News' car rankings and reviews
