Politics & Government

Fairfax County Car Tax: More Than 15,000 Vehicles Appreciated in Value

McLean-based National Automobile Dealers Association says 'Entry Subcompact' category saw 10.8 percent increase in value.

A car loses value as soon as it's driven off the lot, right? Not always.

Thousands of taxpayers in Fairfax County paid higher taxes this year because their cars apparently appreciated in value. The deadline to pay the Fairfax County vehicle tax was Wednesday.

In all, 1.85 percent or 15,089 vehicles in Fairfax County increased in value, according to Norm Graves, director, Fairfax County Personal Property and Business License Division. The remaining 98.14* percent or 797,536 vehicles decreased or had no change in assessed value.

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The current tax rate is $4.57 per $100 of assessed value. 

The county relies on information supplied by theNational Automobile Dealers Association (NADA). Based in McLean, the group shows that certain cars, in the categories listed below, appreciated in value:

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  • Entry Subcompact: 10.8 percent increase
  • Intermediate Sub-Compact: 6.9 percent increase
  • Intermediate Compact: 5.6 percent increase
  • Sport: 3.2 percent increase
  • Luxury Compact Utility: 2.7 percent increase
  • Intermediate Mid-Size: 1.8 percent increase

NADA did not have information available on specific makes and models in these categories.

Fairfax County warned taxpayers of a possible uptick in tax bills with this message: “Vehicle depreciation from one year to the next is the norm, and this remains true for the majority of vehicles assessed in Fairfax County. However, NADA’s valuation guide as of January 1 does in fact show some value appreciation in certain vehicle segments. This is not unique to Fairfax County. It is a phenomenon that occurred throughout Virginia and nationally.”

Taxpayers can appeal the estimated value using this form:
http://www.fairfaxcounty.gov/dta/pdf_files/ppappeal.pdf

The following, from NADA, are seven points summarizing “the results of—and drivers behind—last year’s market performance:”  

1. Used car prices continued to improve reaching an all-time high in December 2010 according to one of our industry benchmarks—the Manheim Used Vehicle Value Index.

2. Dealerships have reported strong profitability with retail gross profits on used vehicles posting an increase of 2 percent year-over-year in November 2010, while concurrently posting an increase in sales by about 20 percent according to NADA 20 Group’s “Dealer Financial Profile” report.

3. We are seeing better inventory management for used vehicles driven by dealer investments in staffing, technology, and analysis, helping to improve used inventory turn rates by 11 percent on an annual basis in 2010 according to CNW.

4. Easy access to vehicle information from a variety of independent sites on the Internet provides consumers with a wealth of pricing, content, and condition information for used vehicles.  This creates an environment with complete transparency where comparative shopping enables consumers to create an expectation of a price for virtually any used vehicle. 

5. Manufacturers are managing incentives more effectively on new vehicles, with incentives down on a year-over-year basis by about 26 percent on trucks and about 10 percent on cars according to CNW.  This is part of a comprehensive brand management strategy being adopted by many manufacturers that helps to improve value retention on used models.

6. The supply of used vehicles will continue to be tight due to the pullback in leasing in 2007 and the overall decline in new vehicle sales in 2008 and 2009.  As these vehicles become the future used vehicle pool, we anticipate returning supply on off-lease and personal units to drop by about 12 percent and about 6 percent respectively.  Lower supply of course supports stronger used prices.

7. Overall, consumer demand for used vehicles is expected to improve slightly based on macro economic trends, improvements in consumer confidence, and a need and desire to replace vehicles in their current fleet (age of fleet has reached around 11 years which is 1.5 years over average). Better access to credit and low interest rates are making financing affordable and available to more consumers compared to the past two years.

AuctionNet, an auction transaction database that represents about 80 percent of the wholesale market, reported year-over year increases of 10-15 percent on used vehicle prices for two- to five-year-old trucks and sport utility vehicles and a 5-10 percent increase on cars.

* Percentages do not add up to 100 percent due to rounding.


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