California: Report: Tripled Vehicle Registration Cost Sends New-Vehicle Sales Plummeting -40%

NBC4 ^ | October 23, 2003

[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.

[tubebender]

Local news interviewed the Chevrolet Buick dealer and his sales are off 30% from last year. He also said GM has special rebates for California car buyers to off set the fees. We need to remind our elected dupes about the obvious consequence of less sales tax collected...

[RatSlayer]

"The guy I work with just registered his Mercedes - $1,399.00 "

Man, that's gotta leave a mark.

[RatSlayer]

"So, they didn't address the potential decline in sales tax revenues from the declining car sales. "

And the decline in income taxes from the car salesmen who didn't get those commissions.

[daviddennis]

The problem is that you'll create considerably more pollution if you keep an older car. I remember reading that a current Ford Expedition (gargantuan SUV) creates something like 98% less pollution than the 60s VW Microbus leftists love to drive.

HelenY: List price on a new Mercedes S500 is around $80,000. A new, fully loaded E-Class is about $60,000. So he probably has either a couple of year old S500 or a new E-Class. Great cars, shame about the registration fee :-).

I have a 12 year old 420SEL and my registration this year is $229. Last year it was $109.

D

[Graybeard58]

"Another telling sign that you can never tax yourself into prosperity. It always hurts somewhere, stupid dimrats"


...Try telling this to our governor (Illinois) he is on the verge of taxing trucking firms right out of the state. He says Illinois needs the revenue because of budget problems.
...Trucking firms all over the state say they will be forced to relocate to other states and they are very serious about it. Bye Bye trucking revenue, Bye Bye jobs. It doesn't get any stupider than that.
...I'll match my dim governers stupidity with anyone elses any day. By the way I can't spell his name--Blajavitchysomethngorother - Call him Idiot for short.

[Zevonismymuse]

I'm surprised it took 24 posts to get to this obvious truth. Why buy now if the price will go down substantially in a short while?

A year ago I would have said the same thing, but I think the average IQ on FR is on the decline.

[cmotormac44]

if he can afford a 70,000 mercedes, he can afford the fees for it, so don't feel a twinge for that individual--i don't care how much money a person makes, why be so stupid as to blow it on a high priced car that does not take you anywhere any/much better than an ordinary one--vanity, vanity

[Dasaji]

I think tripling the registration tax in California is ludicrous - BUT, the decrease this month on luxury cars is nationwide and I can't say if the tax increase in California has totally caused the drop in and of itself in California. It makes for GREAT spin to get the tax down, though. :) We specialize in used highline vehicles and nobody is selling anything right now - which means we don't get inventory. The used car wholesale market is skyrocketing because of this, so used prices are creeping up to their pre-911 levels. There's no supply.

I attribute the nationwide sales plummet to 1) Mortgage refinancing has dried up, people aren't stroking a check against their homes for a new BMW 740 these days 2) Credit has tightened significantly among banks 3)Banks are getting out of the leasing business 4) the media blackout of how the economy really is turning around (DOW up, jobless down, deficit down, manufacturing up, etc.) 5) 0% financing 2 years ago removed too many buyers from the future market (which is now).

[vp_cal]

Liberals believe that by making it more expensive to buy and own cars, more people will take mass transit- social engineering at its worst.

My point about the taxes is that they do not care so much
about how much they collect because their primary goal is
to reduce the number of drivers. Anything they collect is a
bonus.

Some even insist on making the public transit vehicles run
on electrcity...

[BJungNan]

What they need to do is put a tax on luxury yachts instead. That ought to do it.

Dems, they never, ever, learn. What were they doing when the rest of were in Econ 101?

Hey, wait. Does that mean that iF sales are down 40% that sales tax revenue the state collects on new car purchases is also down? Could it be so? Idiots!!!!!

[BJungNan]

Wait a minute. Sales on $ 40,000 cars fell 40% because CA raised the registration fee from $ 50 to $ 150? Not likely.

Try again. The license fee on a $40,000 car is over $800. Before is was $266 dollars. Then there is sales tax at 8 percent, destination charge, documentation charge and the empty tank of gas they give you when you pick up the car that costs you another $45.00 at $2.15 a gallon as soon as you drive off the lot. In all, the dealer will tell you that you need about 10 percent of the cars value just for the above.

[suzyq5558]

I agree with you. I hadnt thought about the collection of taxes in the way you explained and i agree. its the same with the cigarette tax i think.