[heleny]

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.

[pabianice]

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

[vpintheak]

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

[dc27]

The state stands to lose more in sales tax revenue from new car sales than with any increase in registration fees.

[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).

[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!!!!!