Californians will soon be shelling out more cash when they register their cars and trucks. The state’s Vehicle License Fee goes up on Tuesday. It’s among fee increases and tax hikes lawmakers approved in February to help the state close its multi-billion dollar deficit.
Capital Public Radio's Steve Shadley reports...
If you get your vehicle registration notice in the mail later this week, you might be in for a surprise, it’s going to cost you more.
Jan Mendoza is with the Department of Motor Vehicles...
“The old vehicle fee was point 65 percent and now it’s going to be 1.15...”
That’s nearly double what you would have paid to register your car last year...
“If you have a car that’s worth 25-thousand dollars at the old fee it was at .65 percent...your license fee would have been $162.50. But under the new fee, your vehicle fee should be about $287.50 and that’s a difference of $185.00...”
Mendoza says the fee increase will affect more than 25-million vehicles. It’s expected to help California cope with its financial crisis, although most of the money goes to city and county governments...
Sound of DMV Office “...number 2-6-6, go to window six for service...”
It’s a busy afternoon at this DMV office in Sacramento. A few people waiting to register their cars say they’re not happy with the fee increase. Deon Osbourne is among them...
“It’s high enough as it is and people don’t have the money to be paying for all of that. And considering the crisis that we’re in...they shouldn’t be doing that because people need to use their cars to get to the jobs that they’re trying to hold on to...
Jennifer Filosena says the increase will affect her bottom line...
“I’m disabled and I need my car. I would have to sacrifice something to get my registration so I might have to go hungry for two or three weeks, I don’t know...”
When Governor Schwarzenegger came into office in 2003 he reduced the “Car Tax” after it had nearly tripled under his predecessor, Gray Davis. Now, it’s Schwarzenegger who’s depending on the fee hike to help balance the state budget.
People who sell cars expect the increase will impact their businesses.
Brian Maas is with the California New Car Dealers Association...
“Granted a one-half of one-percent increase is not by itself going to substantially hurt car sales...But, on top of a one-percent sales tax increase coupled with a down economy...it sends a signal to consumers that now is not a good time to buy a vehicle because the price is going up...and that’s what our main concern is...”
Maas says when consumers aren’t buying cars, that equals lost jobs. Since the start of 2008, 170 new car dealers have closed in California. And, now that Chrysler has filed for Bankruptcy, he says at least 30 more dealerships are expected to shutdown statewide.
The vehicle license fee increase is temporary. It’s set to expire in 2011 unless voters approve Prop 1A in the special election. In that case, it would be extended until 2013.