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.



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