What made sales plummet is the fact that Arnold (and others running for CA Governor) promised to repeal the tax. People stopped buying, waited to see if the recall would pass, and now that it has passed, are waiting for the repeal to take effect.
Because we have two children 16 & 18 years old attending school and living at home we are paying registration fees on both of their cars, my car, my husbands car, 2 old restored fun cars, one travel trailer and 1 motorcycle. Unfortunately, over half of these vehicles have registration due on December and January. Our newest vehicle is a 1996 Ford Van. I am scared to get the tax bill because I open the statement for the 1995 Dodge yesterday and it was almost $400!!!!!
Thank goodness we are very conservative with our budget. We will get through this but I worry about young couples with little children, living check to check. This is going to wreck a lot of Christmas'.
It might represent a buying opportunity for Californians, though. I can see heavy discounts offered in the last week of December in order to stimulate sales before the year is up. Many dealers might eat the amount of the tax increase, rather than just close up shop for three months.