Financial Incentives for New Technology

February 16, 2009

In the midst of the horrible financial crisis facing most countries of the world, one particular stressor has stood out among the rest. If, six months ago, you had polled drivers around the country about the economic factor that was having the biggest impact on their income and savings, the answer you received almost certainly would have been the ludicrously high cost of gasoline.

While the prices have fallen to a more manageable level in recent months, the damage has already been done and is seen most abundantly in the influence it has had upon automakers and the production of new fuel-efficient hybrid models.

It is for this reason that recent reports of tax breaks and other financial incentives for hybrid car owners are so significant. Business Week recently wrote that customers who had either placed a deposit on or outright bought one of Ford’s new 2010 model hybrid vehicles would receive an unheard of $3400 tax credit when filing their 2009 tax returns.

Several eligible vehicles include the Ford Fusion and Mercury Milan models, which enjoy an astonishing 41 town, 36 highway gas mileage. Claims are made by Ford that these vehicles are the most fuel efficient midsize cars in production anywhere in the world, although Toyota would have consumers believe otherwise, asserting that their Prius luxury model gets 48 miles to the gallon in town, and 45 on the highway.

Whatever the case, these tax incentives and arguments between companies are indicative of one thing: fuel-efficiency is the new gold standard for automakers and the federal government is clearly taking a real interest in the science of alternative fuel sources.

What does this mean for one looking to rebuild their credit? Simply put, now might be as good a time as any to look into a new auto loan, especially if your current one has less than favorable terms. As more and more auto loan contracts go into default as the result of being written during a time of greater economic prosperity, more auto dealers are willing to negotiate contracts with significantly lower interest rates. This news of a Ford tax incentive is just an extension of that, and the next entry in a long line of good news for individuals who find themselves in need of an auto loan during these otherwise dark times.

It should be noted, of course, that, provided that one negotiates responsible terms, a car loan of this type could be used as a great tool for rebuilding credit. Making payments on time month after month and fully paying off a financed high-price item such as an automobile has a tendency to look quite good on a credit report and can raise scores substantially.

Before engaging in such a practice, however, it is vital that you do what you can to ensure that you will certainly be able to make the payments on this loan, lest you find yourself in a worse position than you began in. Whatever the case, and whether you’re just looking for a good deal or a way to rebuild your credit, now is the time to look into securing a low-interest car loan.