TAX CREDITS STILL AVAILABLE (could use mug of herb with the box)
Motorists who could not participate in the Cash for Clunkers program have a second chance at government-backed savings if they buy before the new year.
Sales taxes paid on a car, light truck, motor home or motorcycle purchased after Feb. 16 and before Jan. 1, 2010, are tax deductible up to $49,500 of the sales price per vehicle, according to the IRS.
"The sales tax is a good 10 to 15 percent of the purchase price," Chevrolet dealer Herb Adcox said. "That's a good enticement to buy."
Unlike the Clunkers program, the tax credit is not restricted to fuel-efficient cars, and it does not exclude all high-dollar luxury makes.
Mr. Adcox said the IRS is capping the program at $49,500, but that applies just to the base price, so consumers could get the tax credit for luxury cars, too, he said.
In Tennessee, where the vehicle tax is 7 percent, that's equal to about a $2,870 rebate on a $41,000 Lincoln MKS, or about $1,500 in a rebate for a Chevrolet Camaro. Neither of those cars were eligible for the Clunkers credits.
The tax break phases out for single filers with adjusted gross income of $125,000 to $135,000 and $250,000 to $260,000 for joint filers. There's no limit on the number of vehicles.
Auto dealers feared the worst in October after the cash for clunkers program depleted the market of buyers in July and August.
After all, September was the local industry's worst sales month in 10 years, county records show.
But better-than-expected sales in October have cheered them up.
"October, year over year, I was up 49 cars," said Economy Honda General Manager Corey Choate. "That's a significant increase for us."
Across the nation, Ford and General Motors both had third-quarter sales increases brought on by the stimulus-funded Car Allowance Rebate System program, often called cash for clunkers. Ford even projected a $1 billion profit in 2009 because of the program.
Cash for clunkers expired in August, and dealers expected lean sales figures in the months that followed. September was slow, but October's numbers showed some staying power, coaxing dealers to be more optimistic about future months.
"We're noticing some improvement," said Danny Skates, general manager at Jackson Chevrolet Pontiac Buick GMC in LaFayette, Ga. "Cash for clunkers brought out a lot of customers, and it also generated a lot of interest and traffic."
In Hamilton County, records show new car registrations nearly doubled in August. About 1,000 new cars were registered, marking it the best in more than eight months.
But interest waned significantly in September, with just 719 new vehicle registrations. And while October figures were low, they weren't nearly as bad as some had predicted.
Even at Village Volkswagen, which has reported steady interest and sales ever since VW announced it would build a assembly plant at Enterprise South industrial park, the lack of interest after the clunkers program was noticeable.
"We brought a lot of car buyers into the market prematurely by offering them all those incentives," said Dale Smith, Village Volkswagen general manager. "So we've suffered since August, but overall we can't complain."
TRUCK SALES SLOW
At Herb Adcox Chevrolet, the story is a bit different. The dealership was selling twice as many trucks as cars when the automobile market took a nose dive. While GM is offering attractive, fuel-efficient cars, Mr. Adcox said, there isn't much interest in trucks.
"People who need trucks are generally people who work in fields related to the housing market," he said. "And they are scared right now to make any big purchase, especially something on credit."
New truck registrations have lagged behind cars for most of the year, records show.
Few car dealers are jumping for joy over the latest sales numbers. But at Village Volkswagen, sales are very strong, Mr. Smith said.
"We can't complain about anything here," he said. "With the plant coming to town and our new showroom, there's just a tremendous amount of energy."
His sales have climbed steadily over the last year, and profits have remained steady, he said.
Even the VW luxury brand, Audi, has had steady sales, Mr. Smith said. In the months after Cash for Clunkers, Audi propelled the Village group to even higher earnings, which he attributes to the automaker's new body designs.
"Across the country VW is holding its own," Mr. Smith said. "But here in Chattanooga, the situation is even better."
Adam Crisp covers education issues for the Times Free Press. He joined the paper's staff in 2007 and initially covered crime, public safety, courts and general assignment topics. Prior to Chattanooga, Crisp was a crime reporter at the Savannah Morning News and has been a reporter and editor at community newspapers in southeast Georgia. In college, he led his student paper to a first-place general excellence award from the Georgia College Press Association. He earned ...
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