Tax credit allows the governments benefit to increase a worker whole net income; it is also regarded as being more valuable in comparison to tax deduction or tax allowance. For new car buyers this new policy serves as some sort of “Cash for Clunkers” replacement which just ended recently. However the as the usual norm there is a strict term to targeted new car buyers to qualify; Annual income of less than 260 grand and the cost of purchase is less than 50 grand and applicable for new cars sold between November 08 to December 09.
It is estimated that for a 25 grand worth of purchase a typical family would save around $1,500, roughly equivalent to certain 6% of state sales tax. As recent new car sales is down by millions unit every state in US would loose a huge potential revenues, thus the New Car Tax Credit serves to reset into overall equilibrium. The very least a temporarily upward equilibrium toward the whole national economy balances.
Apparently the incentive is solely devised for the middle class only with no as such for those enthusiasts buying for luxury car, let alone an exotic sports car nor a Sebastian Loeb’s style Rally car. Though some experts believe such purchase may be applicable too being restricted to the less than 50 grand qualifying bracket yet in a very skeptical tone!
Across the globe the Russian government was on the contrary raised its tariff on the imported autos to protect local automotive productions into 30% barrier level, where as in China various incentives have been implemented since 2008 including tariff reduction as low as 10% for auto parts importation. China has recently surpassed its millionth sales and already surpassing US sales figures last July. India also has similar incentive by lowering its auto loan rate.
On a different story South Korea’s auto production has enjoyed a significant sales growth as being on the low cost car segment. Their fuel-efficient and well-equipped, yet affordable cars with generous warranties, such as the Kia Picanto, Kia cee'd and Hyundai i30, which attracted global consumers at a time of severe economic recession, as substitute to particularly Japanese auto brands models. Car purchasers simply flocking in for decent and cheaper alternatives!
On the contrary the consumers in Indonesia who bear the highest purchasing cost in the world are continuing suffer. Indonesian new cars auto market continues suffering from one blow to another; from the weakening currency, the increase of auto insurance rate last year, and recently the government has a new plan to increase tax on car ownership. Those who own more than one car will be hugely penalized for their second, third cars and so forth. No wonder its car sales figures are lagging behind!
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