Serves the Commercial Small Fleet Market of 10 – 50 Vehicles

California New Light-Vehicle Sales Sag After New Fees Take Effect

October 24, 2003

Since California's higher vehicle registration fees went into effect on Oct. 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 J.D. Power and Associates. The data is based on retail sales transactions to Oct. 19.Luxury vehicle retail sales in California declined 40 percent from September to October this year, compared with a decline of only 19 percent over the same period in 2002. Furthermore, total industry retail sales in California declined 35 percent from September to October of this year compared with a decline of 18 percent 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 percent of the vehicle's value. An executive order was signed by Gov. 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 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.
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