We just received our tax bill for this fiscal year, and three of our four cars rose in value for tax purposes, even though the cars are a year older.
The notion of used cars rising in value runs against everything we have come to know about used cars, wear and tear, mileage, and all the other things which common sense would tell us would cause a car to decrease in value each year of use.
The largest percentage gain was in a 2000 Honda Odyssey with over 200,000 miles on it, which is on death watch. The value rose from $2,800 to $3,849, costing us an extra $44.12; the increases in two other vehicles cost us another $139 in taxes.
One of our vehicles did drop in value, but I have not attempted to estimate if it would have dropped even more without Cash-for-Clunkers.
The $183 extra tax cost is a floor, not a ceiling, because it does not take into account that the three vehicles likely would have dropped in value with an extra year of use in normal times.
Virtually every Rhode Islander is going to feel the pinch from Cash-for-Clunkers. Thanks fellas.
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Holy moly, they sure are proud of your car. The RI tax rate is robbery. Time for you folks to man the barricades.
ReplyDeleteUsed car values rise when that countries currency crashes. When Chile's currency crashed, a used car could be traded for a nice home. Cash for clunkers program has some effect but not much.
ReplyDeleteI lived in Virginia for a time and paid tax on my old car each year. All that ridiculous means of raising funds did was ensure that a lot of old cars remained on the road long after their useful lives had ended.
ReplyDeleteI just had my 9 year old, 80,000 mile Passat kick in with a dead transmission. It was worth more dead than alive. I wish I had known of a good chop shop and had not let it go to a dealer. I did get some money from VW for building a product that had a piece of cardboard between the car and the road bed. They did not honor their 10 year warranty because I did not maintain the lines into it - they had corroded. I told them if they had put the fluid lines where they should have been and had put more that cardboard to protect them, we would not be having a conversation. I got a decent "settlement." I now have a 2011 Jetta. Love it and less expensive than its predecessors.
Cash-for-Clunkers was basically the government subsidizing dealers paying higher prices for used cars. Even worse, it was a one time thing, so not only was it a manufactured blip, it was a transient event.
ReplyDeleteI'm no lawyer, but I think you could get the state on misrepresenting the case and essentially running a money grubbing scam.
I don't see why you are complaining. It seems to me that you have (an unrealized) profit because of Cash for Clunkers. Were you to sell your cars, you would receive more for them. However, the poor folks (pun intended) who buy your used car have every right to complain that they must now pay more for your cars. Cash for Clunkers stole from the poor and gave to the rich-there is no need to complain about paying a tax on that windfall.
ReplyDeleteHmmm, a white professor, ie rich, complaining about a $183 dollar tax bill. What are you, some kind of racist or something?
ReplyDelete/end sarcasm
Maybe you can pull a Kerry and register them across the state line.
CG @ 7:12pm on October 5th
ReplyDeleteNo, he can't. The Cash-For-Clunkers program is over and done. The inflated prices paid for used cars is gone, used cars are now back to their old price. It's the state of Rhode Island that's still assessing used cars at a now inapplicable price, and that is, in my unlawyerly opinion, fraudulent.
William gained nothing from Cash-For-Clunkers, has no prospect of gaining anything from Cash-For-Clunkers, and now he's paying for Cash-For-Clunkers.
Besides, it wasn't poor folks who were paying the inflated prices, but used car dealers, and they were using government money to pay the jacked up prices. A poor person bought a used car directly from the owner was more likely to pay what the owner asked for. When they did pay an inflated price it was because they were working in a seller's market, and those suck where buyers are concerned.
But, again, the OP plays no role in all this, because he never took advantage of Cash-For-Clunkers and is now paying the state imposed price for it.
Now, are you going to try giving this some thought, or are you going to jump to conclusions based on your own bias?
Your analysis is incorrect. Rhode Island was using the Blue Book price, which reflects actual sale prices, in assessing the tax. The reason why prices for used cars went up is that the government destroyed all the still working clunkers turned in. This drives up prices for used cars, which are predominently bought by the poor. As for my bias, I still believe that Cash for Clunkers robbed the poor to pay the rich.
ReplyDeleteThe Blue Book price is a measure of what dealers pay, when dealers are paying an inflated price thanks to government subsidies the Kelly Blue Book will list that price.
ReplyDeleteThe Kelly Blue Book is also what the recommended price is, not the actual price you're going to get. It is an advisory. With the subsidies gone dealers are not going to be paying Blue Book, but what they feel the car is worth considering its age, its make, and its degree of maintenance. In other words, assessed value has dropped. But, the state of Rhode Island, and I expect other states, is going by Blue Book evaluation, and that is now out of date. To quote Dr. Manhattan (Watchmen, "Over? Nothing is ever over."
This is probably going to be one of many examples of how Congress has helped (screw) us. Tax on car value is an awful thing. We don't have that here in PA but believe me we are getting it in many other ways thanks to Obama and Eddie Spendell.
ReplyDelete