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I promised to keep you updated through the Cash for Clunkers chaos and now – the least surprising end to the story – the program is kaput!

On Monday, August 24, the government ended the popular Cash For Clunkers program because it has already run out of its second round of funding. In order for dealerships to be reimbursed, they had until 8 pm EST on Monday to submit the 13-page application for any rebates processed. This deadline can only mean one thing, swarms of people headed to showrooms over the weekend.

The program did succeed in bringing a surge in demand for cars, but many dealers are actually happy with the end of such a confusing program, which took too long to process reimbursements.

As of August 20, the Transportation Department had repaid only seven percent of the money dealers had requested. With the program at an end, the government will add on to the size of the work force assigned to handle reimbursement applications.

Even with the extra $2 billion added on to the program, it took almost no time for funding to deplete again, and the government does not plan to add on a third installment. Some dealers could end up having to write off the unpaid credits if funding is exhausted before all reimbursements are made. So, hopefully, if you are in the market for a new car, you headed on over to a car dealership this past weekend!

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The market may go lower and this may be a great time to rent with interest rates starting to climb, but according to this information, it may be time for you to buy a home!

In my previous blog post on May 27, 2009, I told you why this year could be a great one to buy a home thanks to The American Recovery and Reinvestment Act of 2009 and an increase in home buyer credit. But, a new report from IHS Global Insight says that the average U.S. home is now undervalued by 12.2 percent, which makes it even a more opportune times for buying!

Cities once considered “bubble markets” now contain houses priced well below normal — undervalued between 30 and 40 percent.

The most undervalued area in the country is Vero Beach, Florida, undervalued by 42.5 percent! Other cities with home prices below expected include Las Vegas, NV, Cape Coral, FL, Houston, TX, and Vallejo, CA. As for NYC, the median home price is still just about right (same goes for LA and Chicago).

So if you’re looking for affordability and availability, this may be the time for you! For a list of the 10 most undervalued cities or more information on House Prices in America, check out IHS Global Insight.

We’d love to add you to our list, where we send out bookkeeping and tax saving ideas as well as good business building practices. Just click here to sign up today.

ARRA Benefits: Act Now!

Have you been taking advantage of the benefits made available from the American Recovery and Reinvestment Act (ARRA) (link: American Recovery and Reinvestment Act)? As a taxpayer, the IRS wants to remind you that while many incentives come from this piece of legislation, most come with expiration dates, so, it is important to act as soon as possible!

Amongst many other benefits, the American Recovery and Reinvest Act provides incentives for first-time homebuyers, new car purchases, more efficient energy, and college tuition. As a reminder, the First-Time Homebuyer Credit allows you to get up to $8,000 in tax returns on a new home if you haven’t owned one within the past three years (AND if you buy one before December 1, 2009).

You can get credit for up to 30 percent of the cost of making energy-efficient improvements on your home, and as part of the American Opportunity Credit, tuition, related fees, books, and other materials for college can be covered up to $2,500 per student!

There are plenty of other credits and incentives to take advantage of as well, but it has to happen this year! For more on the Recovery provisions that may apply to individual taxpayers see the ARRA page of the Internal Revenue Service website.

Do we live in a great country or what? The government is now in the automotive business. They want you to trade in that old gas guzzler and buy a brand new hybrid. What they need to do is come up with a comprehensive plan that is going to make this country energy self sufficient in 10 years. Instead, they keep putting band aids on the problem. If our leaders would stop treating us like mushrooms and start treating us as partners, problems would be solved, instead of held over for future generations to deal with. Some inheritance, we are leaving for our children. God Bless America!

Cash for Clunkers

Have you been feeling guilty about that old SUV you bought and the damage it may cause with its awful fuel economy? Or maybe you’re just sick of spending so much money on gas every fifth day? Well this summer might be the perfect time to buy a new, more fuel-efficient car!

Last week, President Obama signed a law passing the “Cash for Clunkers” program essentially giving government subsidies when you “trade up” your old, environmentally inefficient car for a new, environmentally-friendly one.

While the premise sounds great, the parameters are a little stricter. Your old car must be drivable and made within the last 25 years, with an average fuel economy of 18 mpg or less. In exchange for turning it in, you get money toward the purchase of a new car.

If the mileage improvement on your new car is 4 mpg or better, you get $3500 toward the purchase; if it is 10 mpg or better, you get $4500 toward the purchase. The money is slashed off the purchase price at the car dealership and reimbursed by the government.

Of course there are clear benefits as this program will stimulate the auto industry and remove old, inefficient cars from the road, but there is much opposition to the program as well. It takes away from car donations, the pollution caused by manufacturing all the new cars may as well outweigh the benefits of removing old cars, and the program only has $1 billion in financing which officials estimate is only enough for about 250,000 consumers. It might be better than nothing though – any stimulation of the auto industry should be enough to outweigh the negatives. What do you think?

For more information on the “Cash for Clunkers” program, check out the official website at http://www.cars.gov. To find out your vehicle’s fuel economy rating, you can go to http://www.fueleconomy.gov.