Car values … rising?
Published 10:10 pm Friday, June 25, 2010
Owners of some vehicles are likely to get a surprise when they see their property tax bill this fall.
People who own trucks or SUVs should actually expect to see the value of their vehicles rise, rather than fall, meaning their personal property tax bills will go up, instead of down.
A number of factors influencing the used vehicle market have caused the values of vehicles with low gas mileage to rise from what they were last year, Commissioner of the Revenue Thomas Hazelwood said.
He explained that gas prices and the federal Cash for Clunkers program caused values to increase.
“This started back in 2008 … when the gas prices escalated,” Hazelwood said. “People dumped SUVs and trucks, and the market value of them went way down.”
As a result of 2008’s record prices at the pump, the National Automobile Dealers Association values — which most localities, including Suffolk, use to assess vehicles — plummeted on SUVs and trucks. When the values were set in January 2009, as per state law, those vehicles were worth significantly less.
However, in 2009, gas prices dropped, and the Cash for Clunkers program came along.
“Gasoline got down to less than $2 a gallon, so everybody jumped back on SUVs and trucks,” Hazelwood said.
The Cash for Clunkers program took hundreds of thousands of used vehicles off the roads throughout 2009, creating demand for used vehicles and driving values up more. When the NADA set its values in January 2010, some types of vehicles — particularly light trucks and SUVs — were worth more than they were the year before.
“It didn’t happen all the way through the portfolio,” Hazelwood said. “The values on many of them are going to be higher this year than they were the year before.”
Taxpayers in Suffolk who own those types of vehicles can expect values to rise between 6 and 16 percent, Hazelwood said.
Most other automobiles “will depreciate on down like they normally would,” he said. “It only happened in the gas-guzzlers, as we call them.”
Suffolk’s personal property tax bills will be mailed out in the fall and are due Dec. 5. Hazelwood hopes to post an explanation of the rising values on his department’s website to eliminate confusion.
He did not know how many Suffolk residents would be affected, he added.