Good news for new car buyers. On the same day that a government "cash for clunkers" rebate was scheduled to go into effect,
Governor Beshear signed into law a bill that includes a major tax credit for Kentuckians trading in an old car for a new one. That law will go into effect September 1.
Lots of people are easily confused when it comes to things like tax incentives and stimulus packages, but state officials were assuring everybody on Friday that this new car trade-in allowance is easy to understand.
The governor himself laid it out for everyone. "Let's say a new car is purchased for $25,000, and you trade in a car valued at $10,000. The vehicle usage tax, which is 6 percent, is applied to the $15,000 difference instead of the entire $25,000 cost of the new car."
Now if a buyer were to wait until September to get that incentive plus the federal "cash for clunkers" rebate, how much could he save trading in that $10,000 car for a new $25,000 one.?
Keith Diskin, the Assistant General Manager at Bill Collins Ford in Jessamine County, says, "With the tax credit, it would save $600 plus up to $4,500 on the "cash for clunkers" so it would be $5,1000 total savings for the consumer."
And Diskin points out that the buyer's monthly payments could be reduced by as much as $130, which all of us would like to have in our pockets.
Harold Mayo, who was shopping for a new car at Bill Collins Ford Friday, told 27 NEWSFIRST, "This whole tax deal is all brand new to me. I'm not sure what's in it so I'll have to look into it further to see how it benefits me."
Actually, the more Kentuckians take advantage of this offer, the sooner it will go away. When the total amount saved reaches $25 million, the trade-in allowance will be discontinued.