No Fiscal Deal Fallout for Potential Car Buyers

plache_lacey2a - January 8, 2013

The last-minute deal to avert the dreaded plunge off the “fis­cal cliff” should have lit­tle impact on most shop­pers think­ing about buy­ing a new car in 2013, says

Edmunds’ Lacey Plache makes the case.

After study­ing the key ele­ments of the fis­cal com­pro­mise, Dr. Plache iden­ti­fied the fol­low­ing impor­tant take­aways for car buyers:

  • Inter­est rates, which are cur­rently at his­toric lows, should not be affected by the deal. The Fed­eral Reserve has repeat­edly pledged to keep inter­est rates low until at least the end of 2014.
  • The pay­roll tax will return to full strength in 2013, mean­ing that the aver­age Amer­i­can house­hold, which makes $41,000 a year, can expect his or her annual take-home pay to be $820 — or the equiv­a­lent of about two car pay­ments — lighter in the com­ing year.
  • Par­ents think­ing about buy­ing a new car can breathe eas­ier know­ing that family-friendly tax cred­its such as the Amer­i­can Oppor­tu­nity Tax Credit, the Child Tax Credit, the Earned Income Tax Credit and the Child and Depen­dent Care Tax Credit have all been extended for at least the next five years.
  • Fed­eral employ­ees and employ­ees whose com­pa­nies depend on gov­ern­ment con­tracts may want to wait a lit­tle longer to pull the trig­ger on a new car pur­chase. Con­gress will con­sider spend­ing cuts in the next few months, which means an uncer­tain future gov­ern­ment pro­gram budgets.