Tax Incentives from Government End

December 31, 2009 12:00:00 AM PST
The government's tax incentive to get drivers into new cars ends Thursday December 31st. Most dealers said the Cash for Clunkers program took away much of this last week's business.Central Valley drivers have more incentives than ever when it comes to buying a new car ... Unfortunately, the rebates and tax breaks available from the federal government end tonight.

"It's not very commonly known to the customers. The customers don't even know about it until they come in and we tell them," said dealer Mike Coble.

Buyers who complete their purchase before the New Year can write off the sales tax on vehicles up to $49,500. That deal began in February. Coble at Lithia Dodge in North Fresno sold several cars off his lot this week however, he is down from this same time last year. And on the last day of the tax break ... business is awfully slow and has been since Cash for Clunkers.

"That Cash for Clunkers thing was $35 or $45,000 in your pocket right now. The tax credit is exactly what it is, it's a tax credit," said Coble.

Cash for clunkers was such a success that lots around town were virtually empty like this one back in August. Now they're stocked with dozens of cars but dealers are saying they're having a difficult time moving them.

"New car business dropped after cash for clunkers. We expected that. We pulled a lot of people forward in the market that weren't necessarily in the market," said dealer James Cagle.

James Cagle said sales at Future Ford and Kia since Cash for Clunkers have been in used cars. However the tax incentive has lured out a special niche market ... small business owners.

Cagle: "They're taking advantage of it. Buying trucks like this. That's a $40-k truck and the sales tax is $2-k that's $2-k they can write off."

Jose Gallegos said any incentive helps not only his family but his construction business in Clovis.

"If it works out it's good for us and my family that's even better. That way it doesn't kill us next tax season," said Gallegos.