Barring a last-minute agreement between two sparring sets of Republican members of the House of Representatives, the U.S. federal government is likely to shut down at 12:01 ET on Sunday. The shutdown will mean most of the federal government’s more than 2 million employees stop working. Some will continue unpaid. But, if you plan to shop for a new car soon, it probably shouldn’t change your plans.
America’s appetite for car shopping has proved remarkably resilient in recent months. Interest rates at 20-year highs and a major autoworker strike haven’t dented it. The government closing many of its doors likely won’t, either.
John Bozella is president of the Alliance for Automotive Innovation, the industry’s largest trade group. He tells industry publication Automotive News, “This is an industry regulated or overseen by multiple departments, agencies, commissions, and boards — across the entire federal government — so there’s no question it could potentially be disruptive.”
But most of that disruption will not impact shoppers in the short term.
States, Not Federal Government, Title and Register Cars
The titling and registration process that happens when a new car is sold is handled by state governments, not the federal government.
Federal agencies have little day-to-day role in car sales.
EV Tax Credits Not Affected Unless This Drags On
Many electric car buyers claim a $7,500 federal tax credit on their new car. But they claim the credit next time they file their taxes, not at the moment of sale.
The shutdown will pause many IRS activities under a contingency plan released by the Treasury Department. But the IRS plays no role in the credit on the day you sign for a new car.
That will change next year when the credit can be used as a downpayment. Should the shutdown drag into January, it could impact electric vehicle (EV) sales. According to The Washington Post, the longest-ever government shutdown lasted 34 days.
Highway Safety Work to Continue
Critical safety work at National Highway Traffic Safety Administration will continue. An NHTSA spokesperson tells Automotive News, “Because NHTSA has various funding sources that are not subject to annual appropriations, our mission to ensure safety on our roadways will be minimally affected by the government shutdown.”
The car safety recall program will continue uninterrupted, the agency says.
We can’t rule out the shutdown having long-term impacts that could affect your car shopping plans. The New York Times notes that a prolonged shutdown could “join a series of other factors that are expected to weigh on the economy in the final months of this year, including high-interest rates, the restart of federal student loan payments next month, and a potentially lengthy United Automobile Workers strike” in slowing the economy.
But, if you plan to talk to dealerships this weekend, the shutdown doesn’t provide a short-term reason to delay.
