Based on participation numbers, the cash for clunkers program has been a great success. In fact, it was almost too successful.
When the program, officially known as Car Allowance Rebate System (CARS), took effect on July 24. It was scheduled to run through Nov. 1 or when the funds are exhausted, whichever happens first.
Last week, the money clause kicked in — almost.
Looking at a dwindling CARS account and shoppers still heading to dealerships, the House on July 31 approved an additional $2 billion to continue the program. The Senate is expected to follow suit next week.
For car buyers, it's a great deal. If you have a qualifying gas guzzler, you could get a rebate of up to $4,500 to help you pay for the purchase or lease of a new CARS-approved fuel-efficient vehicle. The Sun's Financial Diary has replicated a nifty cash for clunkers calculator, created by the auto site Edmunds.com, which also has a comprehensive CARS resource section.
Even better for buyers, as is typically the case with rebates (both tax checks from the government and price cuts from retailers), the CARS money doesn't count as taxable income.
The news, however, is not so good for dealers. Autoblog cites reports that the IRS has issued an advisory bulletin confirming that the federal rebates dealerships receive for CARS trades count as taxable gross income.
That definitely takes some of the shine off what was hoped would be a twofer, that is, a boost for both environmental quality and auto dealers who've been struggling as buyer traffic stalled along with the economy.
As word via angry auto sellers gets back to Representatives and Senators, don't be surprised to see the dealer taxes erased, too.
Added auto incentives: If you're looking for a new vehicle, this is definitely the time to be shopping. Even if you don't have a clunker to trade, a couple of tax laws could help you make your payments a little easier.
There is the new deduction for state and local sales and excise taxes paid on the purchase of a new vehicle. As long as you buy the vehicle between Feb. 17 and Dec. 31, you can write off the qualifying taxes on purchase amounts up to $49,500.
In addition to cars, light trucks, motorcycles and motor homes also are eligible. And even folks who live in states without sales taxes get some relief under this new law.
The IRS has a special FAQ page addressing common inquires about the deduction.
Don't forget about hybrids. Although tax credits for the most popular Toyota and Honda gas-electric combos are long gone, and Ford's tax break was reduced on April 1 (and will drop even more on Oct. 1), you still might be able to find a fuel-efficient auto that meets your needs and budget.
Note that the hybrid tax break is a credit. That means you get dollar-for-dollar tax savings when you file your tax return.
Remember, too, that GM vehicles are still eligible for their full original credit amounts. Those dealers, and majority owner Uncle Sam, would appreciate you giving them a look.
The IRS maintains a special Web page to track the remaining hybrid credits.
And if you exchange your eligible clunker for a hybrid offering a credit, you'll get double the payment help from Uncle Sam.
Energy efficiency on track, too: It's always sunny at Pocono Raceway. At least that's what the owners of the Long Pond, Pa., track hope, since they plan to build the world's largest solar energy project at a sports facility.
About 40,000 photovoltaic panels will be installed on 25 acres across the street from the racetrack on property that had been used as a parking lot on race days. When completed in spring 2010, the solar farm is expected to generate three megawatts, making it Pennsylvania's largest such facility.
The project will cost $15 million to $17 million to build, but track owners say it should more than pay for itself over time
This afternoon, however, the focus will be on the gasoline fueled NASCAR vehicles making their way around the tri-cornered race track.
And since this is the first race weekend of the month, it's also time for my regular motorsports column.
In the August editions of the Randall Reilly publications that carry my racing rants and raves, I look at a car known for its style and speed, not its fuel efficiency, the Corvette.
This Chevrolet sports car is one of the most recognizable autos on the road. It also became such a dominant race vehicle that it had to build a new car for another competition class in order to have someone to run against it.
Find out more about the coolness that is Corvette racing in Views from the Grandstands in Truckers News magazine.
The column also appears under my Crazy Woman Driver alter ego in Changing Lanes magazine. I have a copy of my crazier incarnation in print, but it's not yet posted digitally. When it is, I'll come back and add the link. UPDATE: As promised, here's the digital CWD version.
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Nice article! I recommend using of LED light in the cars to reduce the energy consumption and it’s last longer than ordinary bulb.
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Great article! I definitely love the Corvette and one day when I am rich and famous I will buy one but for now I need to stick with one that gets great gas mileage. I appreciate the great information!