Hammer Time: Tax Season
Tax refund. Got one yet? Well even if you don’t, millions of people will, and this is great news for car dealers. The fortunate folks who can afford to pay off their Christmas largess with a few paltry Benjamins left over will often go car shopping. $700 down, $500 down. Heck anything more than a pulse will get you into a car these days. The effect of all this newfound money being dispersed into our economy: a lot of interesting and stupid behavior at the auctions. For starters, everything gets a lot more expensive.
I’ve seen vehicles begging for a buyer at $700 back in November go for over $2000 come mid-January. Now part of this obviously has to do with legitimate demand. But the better half of this comes from part-time dealers who like to go to the sales and either try to buy during the good season, or like to buy for folks that they know…. or think they know.
I see faces during this time of year that are fixtures for about three months out of the year, and then vanish to the great beyond. Unfortunately for many of them, their valuations are based on auctions in years past before the sub-prime era wiped out resale values.
The few good cars they buy will frequently find a willing buyer. But the several bad ones get stuck at the auctions for months on the end since these buyers don’t have the resources or know-how to fix the cars. As the mischevous sort that I am, I’ll save the trashy trade-in’s for the eternally optimistic buyers of tax season.
[For more info., contact steven.lang@duke.edu]
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Just great, more people with the memory of a gold fish will go buy more cars.
This is very true. Two years ago I wound up having to buy a beater in early March, the old beater was very ill (and not worth fixing). Talk about having to wade through a lot of over priced junk.
I quite often end up owing the IRS a couple of hundred. Usually, the State of Nebraska owes me about the same amount that I owe the feds, so tax time is a wash.The reason for this is that I have regular job and an independent contract job and have to pay the Feds both Self Employment tax and income tax on the independent job while owing the State just income tax. I hate doing quarterlies, so I claim one less dependent than I actually have on my regular job. This pays my entire income tax and all but $200 of SE tax. When I tell people that I usually end up owing the Feds, they ask about penalties and interest not knowing that, in most cases, you can owe the Feds up to $1000 without penalty or interest charges so long as you have at least as much pay withheld this year as last year. RTF tax manual,people!