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Tag: taxes

Tax Season Brings Auto-Buying Boon?

Happy Tax Day!

Right?

Whether it’s happy or not, it’s here (and almost gone). And, according to this article, people getting tax refunds might be spending them on purchasing cars.

The article stated that the average tax refund is around $2,800…which is a nice down payment on a car considering that most people spending their tax refunds are purchasing “entry-level” vehicle. If you also consider the fact that people getting refunds generally file their taxes sooner, consumers could have hit some really great sales as dealerships cleared out lots of old inventory to make room for the newer models.

If you are getting a tax return, what do you plan on spending it on? A 2013 Honda Accord? If you already got your tax return, what did you spend it on?

Auto Industry Has Best Year Since 2007

With credit more available and the economy slowly recovering, the U.S. auto industry sales rose 9 percent led by individuals and businesses who may have stayed out of the market for a couple years and now need to replace aging vehicles.

While this article focuses a lot on GM and Ford, the first paragraph of the article (and another paragraph near the end) mentions that this growth is led by foreign manufacturers, like Honda.

Of course growth in the automobile industry is welcomed by every automobile company, foreign or domestic, and the level of growth last year is definitely encouraging. However, we thought the most interesting part of this article was the discussion of how national politics and tax increases on midde-income families could affect the automobile industry.

Many industries, including the auto industry, were and are paying close attention to the debt ceiling talks and the fiscal cliff that was “largely averted” Jan. 1 of this year. The article points out that there was a payroll tax increase that took effect at the beginning of the year and the hostile national politics affecting the economy may keep people off the dealership lots.

The 2 percent tax increase will take about $1,000 from the average household budget, the article said, which is about the same as a down payment on a vehicle.

“It would have been nice if all the open questions had been resolved in the ‘fiscal cliff’ discussion over the holiday, but clearly they weren’t, and that does extend this period of uncertainty from a consumer point of view,” Jonathan Browning, head of Volkswagen AG’s American unit.

The auto industry is hoping that more available financing and an economy that’s recovering as a whole will be enough to compensate for uncertainty and higher taxes.

“The cheap financing and improved income will make up for that, but that’s something we’re going to have a keep an eye on,” Jesse Toprak of TrueCar.com said.

What do you think? Will $1,000 less out of your family’s budget and uncertainty about the economy (and the politics involved) affect your car buying this year?

 

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