It's a fact: If you buy a car today or Thursday, you're going to save more money than if you wait a day or two.
At midnight on Thursday, a little-known aspect of a federal law will expire. It allows buyers of certain new vehicles to write off or deduct the sales tax.
We're talking some significant money here. The sales tax on the average new SUV is about $1,200. The sales tax on a new $20,000 car is $600.
The Internal Revenue Service law that makes the sales tax deduction possible is called The American Recovery and Reinvestment Act, also known as the economic stimulus package. It provides a write-off for new cars, light trucks, motor homes and motorcycles, up to a maximum purchase price of $49,500.
Word of the tax break and its pending expiration has been slow to trickle down to buyers.
David Everett of Everett Chevrolet says his sales people have been telling customers about the tax break and how it goes away on Friday.
Bradley Ingels, sales and finance manager of Armstrong Ford, says he's taken the extra step of giving each buyer a slip of paper that lists the applicable sales tax, "so they can give it to their tax consultants."
Everett emphasizes that "We're not tax advisers," and also recommends that car buyers consult with their tax preparers about the incentive.
Taxpayers can take the deduction without itemizing.
For buyers trading in, the tax applies to the trade difference, not the full sales price. If a buyer gets a $2,000 trade-in on a $20,000 car, the tax credit only applies to the $18,000 difference.
Car dealers, however, say buyers can take the full tax credit on any vehicles with rebates, at the pre-rebate value.
Car buyers who made their purchase after Feb. 17, 2009, are eligible for the sales tax write-off. But when the new year arrives, the deal disappears.
"Car buyers just haven't been aware of it," said Benny Yount, president of Paramount Automotive Group. "It just hasn't been publicized."
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