Vehicle manufacturers and dealers are promising you the world right now in an effort to restart the industry’s engine.
They’ll make your car payments if you lose your job. They’ll give you an interest-free loan. Even the federal government is getting into the game with tax breaks and promises to cover repair warranties if automakers go bankrupt.
So is now a good time to throw caution to the recessionary winds and buy? Many consumer experts think so – as long as you can afford it and do your homework.
“It’s a unique moment in time. There’s a great selection, and the dealers are hungry to make deals,” said Jeff Bartlett, deputy editor at ConsumerReports. org.
While Congress is reviewing several “cash for clunkers” proposals, which would give consumers credit for trading in their old ride for a new one, auto-industry expert Jesse Toprak warns those who wait for such a bill to pass might miss the on ramp.
“There’s going to be a lot of activity and the new car you want may be gone,” said Toprak, senior analyst with Edmunds.com, which compiles and publishes automotive information.
But even those bullish on buying warn that great deals don’t always equal wise purchases. Special offers may carry heavy restrictions or be on poor-performing vehicles that will cost you more in the long run.
Both Edmunds.com and Consumer Reports offer “best value” rankings that plug in multiple factors over five years of ownership: purchase price, fuel economy, resale value, repair history and others. Financial incentives also may prove too paltry to warrant shouldering new car payments.
Congress recently passed legislation granting taxpayers nationwide an income tax deduction for sales tax paid on vehicle purchases, although it applies only to new autos purchased between Feb. 16 and the end of the year.
Instead of being driven by deals, the experts advise first looking at your finances to determine if you comfortably can afford car payments.
If so, set a budget and determine exactly what kind of car will best fit your needs, said Eric Hoffman, spokesman for Americans Well-informed on Automobile Retailing Economics, an industry group that educates consumers on auto financing.
Then thoroughly research top-rated models within your category, checking reliability and resale potential.