Posted on 10/23/2003 5:35:10 PM PDT by heleny
Report: Tripled Vehicle Registration Cost Sends New-Vehicle Sales Plummeting
Retail Sales Drop By 40 Percent This Autumn
POSTED: 11:48 a.m. PDT October 23, 2003
UPDATED: 12:09 p.m. PDT October 23, 2003
LOS ANGELES -- Since California's vehicle registration fee tripled at the start of the month, new-vehicle sales have plummeted, with luxury-vehicle sales hit especially hard, according to J.D. Power and Associates.Based on retail sales through Sunday, luxury vehicle retail sales in the state dropped by 40 percent from September to October, compared to a decline of 19 percent over the same period a year ago.
Total industry retail sales in the state declined 35 percent over the same period compared to 18 percent a year ago, according to Power Information Network, an affiliate of J.D. Power and Associates.
Luxury-vehicle retail sales nationwide, excluding California, declined 25 percent from September to October, compared with a 17 percent dip last year, while the industry-level retail sales dropped 27 percent from September to October, compared with a 21 percent decline a year ago.
The data is based on retail sales transactions through Oct. 19, 2003.
To help plug a $38 billion hole in the state budget, in June, Gov. Gray Davis signed an executive order for the Department of Motor Vehicles to begin charging California drivers who registered their vehicle on or after Oct. 1 up to three times the amount of the previous fees.
The fee amounts to 2 percent of the vehicle's value.
"We saw a spike in sales in California the last several days in September, with consumers trying to register their vehicles before the new law went into effect," said Tom Libby, director of industry analysis for PIN. "It's apparent California consumers are hesitant to buy right now."
He noted that Gov.-elect Arnold Schwarzenegger has vowed to repeal the car tax on his first day in office.
http://www.just-auto.com/news_detail.asp?art=42522
USA: California new light vehicle sales said to have dropped after new tax hits
23 Oct 2003 Source: just-auto.com editorial team
Since California's higher vehicle registration fees went into effect on October 1, new light-vehicle retail sales in California have dropped significantly, with the luxury vehicle market taking a substantial hit, according to Power Information Network (PIN) LLC, an affiliate of JD Power and Associates. The data is based on retail sales transactions to October 19, 2003.
Luxury vehicle retail sales in California declined 40% from September to October this year, compared with a decline of only 19% over the same period in 2002. Furthermore, total industry retail sales in California declined 35% from September to October of this year compared with a decline of 18% in 2002.
The Department of Motor Vehicles began charging California drivers who registered their vehicle on or after Oct. 1 up to three times the amount of the previous fees. The fee amounts to 2% of the vehicle's value. An executive order was signed by governor Gray Davis in June in an effort to help the revenue-depleted state.
"We saw a spike in sales in California the last several days in September, with consumers trying to register their vehicles before the new law went into effect," said Tom Libby, director of industry analysis for PIN. "It's apparent California consumers are hesitant to buy right now, however Governor-elect Arnold Schwarzenegger has already vowed to repeal the car tax on his first day in office."
Retail sales for the other 49 states also dropped, but the drop is marginal in comparison with California. Luxury vehicle retail sales nationwide (excluding California) declined 25% from September to October, compared with a 17% dip last year, while the industry-level retail sales dropped 27% from September to October, compared with a 21% decline a year ago.
Why not?
$50.00 would register a mid-80's vehicle, pre - Oct. 1st.
Unfortunately, even on their own terms, this is where they shoot themselves in the foot.
New cars not purchased means sales tax and vehicle license fees which don't get collected at all, in the first place.
Check your math. The registration fee was $30 (flat), and the other smog/etc fees were unchanged. The Vehicle License Fee is the only tax increase. It increased from $267 to $800.
For comparison: sales tax was unchanged at $2900 plus local sales tax.
You're right, a (relatively measly) additional $533 annually shouldn't make a difference in the sale of a $40,000 car. But, consider car leases, where a driver pays monthly payments on a car but has to surrender the car after the 3 years term of the lease. He has to pay the registration/VLF fees while he uses the car. In that case, where his monthly payment is probably $300, perhaps because he cannot afford a car loan to buy the car, the increased upfront costs may break the deal.
I don't know about all the other fees that some Mercedes Benzes incur, like the "gas-guzzler" tax or the luxury tax -- are those one-time only? There's also a "smog impact fee" and other sundry fees including $30 registration. If those don't add much, then his car is valued by the DMV to be around $60,000.
What are typical yearly car payments for someone who buys a $40,000 car? (honestly curious)
That's right, but the Davis democrats evidently haven't figured it out yet. Bustamante still wanted to increases cigarette/alcohol/sin taxes during the election, even though such taxes may not provide the predicted revenue increase.
The article was probably a JD Powers press release, since the two versions are nearly identical. So, they didn't address the potential decline in sales tax revenues from the declining car sales.
To register it? 2% of the value (=$800), plus $30 registration, plus "smog impact fee" and other little fees.
Every other year, you have to do a smog check, which costs around $30 for regular cars but costs around $50-60 if it pollutes more, like some Mercedes Benzes or SUV's, and has to go to a "test only" center.
I'd guess the total is around $900.
Interesting, thanks.
If true that means I can get a $40,000 car for a (monthly? I'm assuming) payment of around 40 x 16.70 or yearly payment of 12 x 40 x 16.70 = $8016. By a previous post the increased license tax adds $533 to that, an increase of 6.6%.
The difference is between paying $668 a month or $712 a month. Not huge, but not "measly" either IMHO.
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