Welcome

Thank you for visiting paducahsun.com, the online home of The Paducah Sun.

Calendar
June 2012
S M T W T F S
27 28 29 30 31 01 02

Click here to submit an event.

Tax credit could save car buyers money

By Mike Wynn The Courier-Journal

FRANKFORT - New-car buyers could save hundreds of dollars by postponing vehicle purchases until a state tax credit takes effect next month.

Kentucky, under current law, collects a 6 percent motor vehicle usage tax based on the purchase price of new cars. But starting July 1, consumers can lower the tax by subtracting the value of a trade-in from the value of the new vehicle.

That could save the average buyer more than $600, state figures indicate.

The Courier-Journal left messages with eight dealerships in the Louisville area seeking comment, but only one returned phone calls.

Bob Hook, president of Bob Hook Chevrolet on Bardstown Road, said dealerships have long supported the change even though it puts them in an awkward position as they try to move inventory toward the end of the month.

"We feel very good about it because we feel like all our border states have a better deal going," Hook said. "Obviously, it is very consumer friendly."

Gay Williams, president of the Kentucky Automotive Dealers Association, said most states - including all those that surround Kentucky - already offer a similar tax credit, and dealers hope it will stimulate purchases in the commonwealth.

"It's really been a disincentive for people in the state of Kentucky to purchase new cars, because of the tax burden," she said. "We are catching up."

The state already offers a similar tax discount on purchases of used cars, and those who will gain the most from the new credit are consumers who trade in high-value, late model vehicles for new ones.

For example, someone who purchases a $25,000 car with a $10,000 trade-in will pay the usage tax only on the $15,000 difference, which decreases the tax burden from $1,500 to $900.

Kentucky offered the same tax break on a temporary basis in 2009, and consumers reaped the benefit in nearly 37,000 purchases, according to the state Department of Revenue.

Richard Dobson, executive director for the Office of Sales and Excise Taxes, said the average buyer received a $670 credit with a trade-in during the 2009 program, but the department does not have projections for the market this year.

Dominion Cross-Sell, an automotive market research firm based in Lexington, determined that new vehicle purchases climbed about 8 percent during the 2009 program.

Still, Shane Marcum, general manager for Cross-Sell, said it's hard to predict how the new tax relief will impact purchases since sale volume is heavily dependent on manufacturer incentives and seasonal factors.

Comments made about this article - 0 Total

Comment on this article

Your comment has been submitted for approval
captcha e668487cb6fd49bf8de48398a91dbdc1
Top Classifieds
  • UKC TOY RAT TERRIER pups, $175519-346 ... Details
  • HAVANESE PUPS AKC Home Raised, Best H ... Details
  • GREAT Dane puppies. Avail. 7/17. Wi ... Details
  • FREE: 1 yr. oldPit Bull270-627-3400. Details
  • PILLOWTOP Mattress Sets, NEW in plast ... Details
  • RUNNING, fixable, junk vehicles, equi ... Details
  • 2445 HOLT ROADCommercial space, 800 s ... Details
  • 3BR, 1Ba, 251 Cedar Ln. Symsonia, KY ... Details
  • Look @Our Website www.drakecreek.info Details
  • SEEING is believing! Don't buy p ... Details
  • IGLOO - 21st and Old Mayfield Rd. Mu ... Details
  • '86 Conn, 68x14, 3 bdrm., 2 ful ... Details
  • Approx/15 Nice Rental Houses. 270-556 ... Details
  • JOE'S BACKHOESERVICE Install &am ... Details
  • Gulf Stream Sun Voyager 2003 37 ft. V ... Details
This Week In Photos
Most Popular
  1. Local sports schedule
  2. Greeks on edge as referendum vote draws near
  3. Forecasters predict dry Fourth of July
  1. Horse park plans to paint fences black
  2. Fish market aims to boost carp sales
  3. Couple married 75 years dies together
  1. Local sports schedule
  2. Greeks on edge as referendum vote draws near
  3. Forecasters predict dry Fourth of July
Discussion

Check out these recently discussed stories and voice your opinion...