Good time to buy 4-wheeled gift
By Anne Mitchell
The (Fort Myers, Fla.) News-Press
Auto and bike dealerships and boatyards stand ready to supply the kind of "toys" that affluent adults buy for themselves and their families at this time of year.
Amanda Inscore • Fort Myers (Fla.) News-Press
And there is an added plum for big spenders to consider: tax breaks and other incentives make December one of the best months of the year for buying an automobile.
A young customer looks at all-terrain vehicles, a big-ticket gift for adults, at a dealership in Fort Myers, Fla. December offers many incentives for buying vehicles and other large items.
Whether it's a $75,000 Hummer H2 or a $27,000 retro Ford Mustang, there are several benefits to buying a four-wheeled gift in December, according to Kelley Blue Book's executive editor, Charlie Vogelheim.
Dealers need to meet annual and month-end quotas and sell last year's models to make room for the new ones. They, too, have pressing tax incentives for reducing inventory.
"Many manufacturers are offering cut-rate financing or rebates on most 2004 vehicles and even some 2005 models," he said.
Do your homework.
"Determine what incentives are available on the cars you are looking at. And also check the car's MSRP, dealer invoice price and the transaction value or what other people are paying for a new car this week. You can find all of these things on the Internet at sites like kbb.com. Print them and bring them with you to the dealership," Vogelheim said.
If you are not the haggling kind, you can always request a couple of price quotes online from your local dealer. Sites including Kelley Blue Book allow car buyers to submit price quotes to several dealers in three quick steps.
"Armed with this information, wrapping up a new car in one of those giant red bows can be a reality this year," said Vogelheim.
Amanda Inscore • Fort Myers (Fla.) News-Press
If you really do want that giant red bow, Vogelheim said, check out www.kingsizebows.com, where they actually will sell you an individual bow for that one-of-a-kind holiday gift.
A Yamaha Waverunners might not be easy to wrap, but year-end deals could make them an attractive idea for a Christmas present.
Buying a Hummer or a large SUV — or any vehicle that weighs more than 6,000 pounds — can also be a savvy move at this time of year for business owners. It's a gift that keeps on giving by providing a year-end tax break.
Although the government on Oct. 22 tightened a massive loophole available to anyone who used a vehicle weighing 6,000 pounds or more in their business at least 50 percent of the time, there's still an advantage to buying late in the year. But instead of being able to depreciate up to $100,000 of the cost, it's now been cut to $25,000.
"No matter when you buy it, (the IRS) is treating it as if you bought it mid-year and you can take $25,000 depreciation in the first year," said Mike Arnow, of Arnow & Associates in Glendale, Wis., a financial planning and tax consulting firm.
Check with your tax professional to see how your individual tax situation is affected.
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| Why buy
December is a good month to buy a car, boat or motorcycle from a dealer: • Most dealerships and their salespeople have month-end quotas to meet. • Quotas are issues. The number of cars dealers sell over a year's time determines what inventory and how much of it they'll receive in the coming year from their franchise manufacturer. • Dealers and manufacturers want bragging rights to having the best-selling car, truck or SUV in America. They offer deals at the end of the year to reach that magic number. • Dealers in most states must pay "inventory tax" on all inventory unsold on Jan. 1. The best way to get around this is to sell as many cars as possible before Dec. 31. • Many dealers may offer great deals on last year's models to make room for the new year models. Source: Kelley Blue Book |
