Stimulus tax credit for new car buyers sends AWARE into action

Stimulus tax credit for new car buyers sends AWARE into action

The federal stimulus package signed into law by President Obama includes
a $2.3 billion tax break for new car and truck buyers, which could save
auto buyers hundreds of dollars. With potentially significant savings,
auto shoppers should continue to do their homework in preparation for
vehicle financing decisions, says AWARE, a non-profit auto financing
education group.

"This tax credit may make a new vehicle purchase more feasible for many
consumers in the near future," said Eric Hoffman, spokesperson for
AWARE. "Auto buyers should educate themselves about financing before
making a purchase. Shoppers should maintain a solid credit track record,
and shop around for financing among several sources, including banks,
credit unions, financing companies and auto dealers."

As part of the stimulus package, taxpayers will be able to deduct the
both local and state sales tax paid on new car purchases up to $49,500.
The tax break will cover the purchase of any new car, domestic or
foreign, through the end of 2009. Additionally, the deduction is "above
the line," which means that it reduces the amount of a filer's taxable
income. Eligible taxpayers must have an annual income below $125,000 for
individuals or below $250,000 for families.

With the availability of this tax credit in the stimulus package, auto
shoppers will see noteworthy savings on new car and truck purchases.
Given this opportunity for savings, shoppers should continue to follow a
proven approach to financing preparation, according to AWARE.

"Auto shoppers who are considering purchasing a car today or within the
coming months should continue to educate themselves about the financing
process," Hoffman said. "Our research has shown that consumers who are
educated and informed about the auto financing process are the most
satisfied with their auto financing decisions."

With the vehicle-buying opportunity presented by the stimulus package,
AWARE reminds car buyers that the most important steps to prepare to
finance a vehicle are:

-- Understand your credit history - When credit is tighter, as in
today's economy, consumers with a strong credit history will still
obtain the most attractive rates possible, while those with sub-optimal
credit may find fewer financing options. Check your credit rating by
obtaining your credit report from www.annualcreditreport.com.
Immediately contest any errors, settle outstanding debts, and build your
rationale for anything negative.

-- Evaluate your financial situation - Determine how much you can afford
to put down and pay on a monthly basis. A list of online auto financing
calculators and interactive budget worksheets can be found at
www.AutoFinancing101.org/LearningSuite. Once you settle on a budget,
make sure you stick to it.

-- Learn the language - Make sure you are familiar with common terms
you're likely to hear or read in the course of purchasing or financing a
vehicle, such as APR, down payment, fixed and variable-rate financing,
and on- and off-site financing. Many of these terms can be found at
www.AutoFinancing101.org/resources/glossary.asp.

-- Shop around for financing - Given today's marketplace, shopping
around is a key. Compare financing from a variety of sources, including
banks, credit unions, financing companies, and auto dealers. It's in
your best interest to use the competitive market to your advantage by
considering all of the financing options available to you, and choosing
the one that best fits your individual needs.

A host of tools, calculators, articles and other resources to help
consumers sufficiently prepare for auto financing decisions can be found
on AWARE's Web site (www.AutoFinancing101.org) - available in both
English and Spanish.