Black Friday: Best Day to Buy a Car

The day after Thanksgiving – known as “Black Friday” to enthusiastic bargain hunters – is one biggest shopping day of the year for retail stores across the county. However, you may not know that it is also one of the best days of the year to buy a new car. According to CNN Money.com, studies show that on Black Fridays car dealerships historically offer large discounts on both new and used cars.

Analysts looked at day-by-day car pricing for the last several years. That data revealed that discounts on Black Friday are, on average, the biggest of the year.

"The discounts from dealerships, as well as manufacturers' incentives, generate the highest discounts of the year on Black Friday," said Jesse Toprak, an analyst for Truecar.com.

Unlike typical Black Friday sales where customers know exactly what they'll pay for an item, car prices are individually negotiated the day of the sale, so it's difficult for customers to know ahead of time they'll be getting a deal. But there's been a clear trend, Toprak said.

Continue reading at CNN Money.com…

Tax Deductions For Car Purchases Now Apply To All States

From the Boston.com:

[T]he American Recovery and Reinvestment Act (ARRA) passed earlier this year, provides a tax deduction for the purchase of a new qualified vehicle. The Treasury announced last week that this incentive now applies to all states – including those that do not impose a sales or excise tax. This includes Alaska, Delaware, Hawaii, Montana, New Hampshire and Oregon.

Purchasers of a new qualified vehicle in the states mentioned above can now take an above-the-line tax deduction for fees and other taxes that are imposed by the state or local government. These fees and other taxes must be based on the vehicle's sales price or as a per unit fee in order to qualify for the deduction.

All of the other provisions of this incentive are the same for all states including:

• New vehicles include cars, light trucks, motor homes, or motorcycles.
• The deduction is only available for purchases made on or after February 17, 2009 and before January 1, 2010.
• The deduction is limited to the sales tax, excise taxes, or fees paid on vehicles with a maximum purchase price of $49,500 dollars.
• If you are married and you file a joint tax return have, the deduction gets phased-out once your modified adjusted gross income (MAGI) reaches $250,000 dollars and is completely gone if your MAGI is more than $260,000 dollars. For all other taxpayers, the phase-out range is a MAGI of $125,000 dollars to $135,000 dollars.
• The deduction is available whether or not you itemize your deduction on your tax return.
• The deduction must be taken on your 2009 tax return (which is filed in 2010).

Tax Advice for New Car Buyers

With all of the talk about auto industry bailouts, and bankruptcies, most consumers have become quite weary of buying a new car. However, if you were holding out, now is just as good of time as ever to get that new vehicle. In fact, there are plenty of tax benefits to encourage you. To help the readers of my blog wanting to know more about these savings, I have put together the following list of tips for new car buyers.

Local Tax Deductions

One of the biggest incentives to buy a new vehicle is the federal tax law that allows you to deduct both local and state taxes paid. However, you must make the purchase between February 16 and December 31, 2009. Although the savings begin to phase out with more expensive car purchases, this deduction can easily save you thousands of dollars come April 2010. To qualify, single taxpayers need to have an adjusted gross income of less than $125,000, and for joint taxpayers, the cap is $250,000.

Plug-In Hybrids

If you are looking to get a new fuel-efficient vehicle, then you may want to consider waiting for one of the new plug-ins due to be out later this year. There are lots of advantages to buying plug-in hybrids, especially ones that can run entirely on their batter power without using any fuel. However, there are also specific tax benefits that have become law during the Obama administration. For the first 250,000 plug-ins sold, owners will receive a tax credit ranging between $2,500 and $7,500. After those first cars are sold, the credits will still be available but in reduced amounts.

Sales Tax & Registration

When buying a car for the first time, many buyers will make the mistake of assuming that the price tag on the car is the exact amount they are going to pay. This is untrue. Although the price listed on the vehicle will be your main expense, sales tax and registration can easily increase your total costs by a few thousand dollars. When you are estimating the type of car you can afford, be sure to add in your local sales tax and registration! That way you can avoid potential surprises when you go to sign the purchase documents.

Business Expenses

If you are going to be using the car you purchase for your business or primarily as a business vehicle, then you may be able to benefit from additional tax deductions for purchasing and maintaining the vehicle. However, be sure to check with an accountant or tax professional before taking any of these deductions, as the IRS can be very strict about vehicle related expenses.

Car Pooling

If you are planning to use your new vehicle to carpool to work, make sure to check with your employer to see if they offer any incentives for doing so. Even if your employer does not participate in a program, you could still consider forming a carpool with some of your coworkers. To learn more about how you can save money by sharing a ride, check out this article about carpooling on doityourself.com.

State and Local Incentives

If you have been eyeing a certain vehicle but are not sure it is in your budget, then make sure you to check your state and local tax laws. Although most federal hybrid credits began phasing-out already, there are still numerous states that are offering tax incentives to purchase a hybrid or eco-friendly vehicle.