I haven't seen any news articles to this effect yet, but I imagine that the success of the recall and the election of Arnold have caused car sales in California to temporarily plummet. Why? Because the tripling of the Vehicle License Fee ("car tax") went into effect October 1st, 2003, and Arnold has vowed to repeal it.
As it stands, the VLF is 2% of the value of the car, but once it is discounted again (assuming Arnold follows through) it will be reduced back to 0.65%. So, for example, a family considering buying a new $20,000 sedan will pay a VLF of $400 if they buy now, but only $130 if they buy... next month? Next year? No one knows, and so I imagine no one is buying.
There's a strong push in California to eliminate the VLF entirely, but with the budget deficit that's another $2 billion Arnold would need to cut from elsewhere. I'm not holding my breath.
What is this Vehicle Licensing Fee?
Is it 2% of the MSRP value of the car when bought new?
Is it 2% of some state-established value every year? Massachusetts towns pays $.025 per year per value, but the town assesses my car at way, way , way below wholesale book -this is dumb.
What's $400-270 when you can get power windows, locks, air conditinoing and CD player for $199/mo for 84 months? This won't stop people, don't dealers just pay the tax for the consumer and finance it anyways? I would.
How is it that the new governor can repeal a law with the stroke of a pen? Whatever happened to the legislature having to repeal such statutes?
It's actually somewhat technical, but the VLF wasn't actually "raised", rather a reduction of the VLF was repealed under the authority of the law that granted the reduction. My understanding is that Arnold can instruct the DMV to begin collecting again at the reduced rate, without going through the legislature (although that understanding is not universally agreed to).
If the VLF has been reduced, what happens to the people who purchased/registered their cars from 10/1 - 11/16?