Cash For Clunkers, Yes you Participated!

June is a wonderful month for most of us.  Longer days, warm days, flowers in bloom.
Then the mailman rolls on by and drops off letters and bills.  One bill that most people
who own cars receive towards the end of  June beginning of July is the yearly Property Tax Bill from your town hall.

After reviewing my tax bill for my automobile,  I noticed something that I thought was a bit odd.
The value of my car was 12% more than it was last year.   My total tax due to my town was $135.45.
Not a great deal of money, but on the other hand my biggest issue was why my car had increased in value.

I always pay my automobile tax in person and in cash.  While being waited on by the Tax Collector of my town,
I kindly asked her if I could ask a question regarding the bill.  In a polite way she said, “I might be able to.  What is your question.”

“How do you determine the value of a car to apply the tax.”

“Well, I can’t answer that.”, she said, “You see I only collect the tax, I don’t assess the value of the car.
What you need to do is talk to the assessors office.”

My mind was racing.  I am thinking on my way to the assessors office that you need to have one
government agency collect the tax, and another one to asses property value.  Wouldn’t you want to
have just one department, save money and stream line the whole operation.  Oh wait that is right
we are talking about government, that’s not the way things are done.  Wonderful!

I walked into the Tax Assessors office.”  Sitting at her desk she looked up and asked, “How can I help you?”

I asked, “I would like to know how you place a value on a car for tax purposes.  I am a bit confused as to why my car’s
value went up when it was just another year older.”

Well I learned allot from this conversation, and to spare you all the other details, lets just go over the facts shall we.

First Cash for Clunkers officially known as Car Allowance Rebate System (CARS) played a major roll in determining
the value of my car.  The program was effective from July 1, 2009 and November 1, 2009.
The goal of the program was to remove older, inefficient cars from the road,
and stimulate the auto industry, which has fallen on hard times.  This all plays into the whole GM bailout, that is a whole other story.

The Requirement to trade in a car under the program had to meet these three guidelines

  • Car must be at least 10 years old and have been made after 1984.
  • Trade-in must get 18 mpg or less in combined highway and city driving.
  • Must be registered and insured in purchaser’s name for 1 year prior to trade-in.

And to qualify for the trade in voucher the vehicle had to meet these standards

  • Passenger vehicles must average 22 mpg, improve at least 4 mpg over trade-in, and cost less than $45,000.
  • Small light duty trucks must improve 2 mpg over trade-in.
  • Large light duty trucks must improve 1 mpg over trade-in

Or

  • Passenger vehicles must improve 10 mpg over trade-in.
  • Small light duty trucks must improve 5 mpg over trade-in.
  • Large light duty trucks must improve 2 mpg over trade-in.

Depending upon the guidelines that you met you either got a $3,500 voucher or a $4,500 Voucher.

Now how does this all play into your Automobile Property Tax you ask? Well here is the unintended consequence of
Cash for Clunkers.

As a result of this program the number of older cars available to purchase as used cars fell.  This had the effect of making those
that remained on the road more valuable.  The effect was the government made something scarcer which drove up
the cost on the remaining vehicles that were NOT traded in.

So one would ask why a town  not use the Kelly Blue Book Value of an automobile.  Well they can’t?

According to the Laws of The State of Connecticut they are required to use the NADA Used Car Guide.

Conn. Gen. Stat. §12-431(b) and Conn. Agencies Regs. §12-431(b)-1 provide that the value of a motor vehicle in the current month’s N.A.D.A. Official Used Car Guide, Eastern Edition, is presumed to be the total purchase price of the vehicle. When the motor vehicle is registered, the Department of Motor Vehicles will collect use tax on the greater of the N.A.D.A. book value or the amount paid for the motor vehicle.

Comparing the value of a USED car with both books will result in two different outcomes.

As a result of Cash for Clunkers, NADA explains it this way

“The combination of diminishing new and used vehicle supply and increased
consumer demand drove used vehicle prices upward between October 20101 and October 2011.
First at the wholesale level (dealers purchasing vehicles at auctions to sell as retail units on their lots) and
then at the retail level.

The bottom line is there is no longer an easily predicted rate of depreciation for used
vehicle values.  Economic drivers including gas prices, new and used vehicle
supply,. major weather events, domestic and international
political instability and many other factors will continue
to influence used vehicle values and may result in increases or decreases year over year.”

So as you can see after Cash for Clunkers program was over the price of used cars rose.

One other bit of information that you need to know.  When you pay the property tax on your car, I am not sure if it
this is true for a house or building, you are really paying for the previous years tax, 2011, not 2012.  The value of the
your car therefore was assessed in your towns fiscal year of the previous October.
It also gets a bit weirder too.

I was told that when I paid my tax on July 24, 2012 at 1:13pm, I was really paying
half of the towns fiscal year 2010-2011, and the other half was being applied to 2011-2012

There has been talk about repealing the property tax on cars in the state.
Even Gov. Jodi M. Rell proposed repealing the property tax on automobiles in 2006,
and made up for the lost revenue with in her budget.
And by the way there are 37 states that do not place a property tax on automobiles.

Living in a state with one if not the largest tax rate on gasoline, I think its time that the citizens are given a small break
by repealing this nuisance tax.

37 replies
  1. Sal
    Sal says:

    My car value went up about 5% that and with the raise in the mill rate made my tax bill high enough so I can pay half by 8/1 and the other by 2/1/13 unlike last year when I had to pay it all by 8/1.I also love how they tell you if we didn’t get money from the state the mil rate would be higher

  2. SeeingRed
    SeeingRed says:

    Taxes NEVER get repealed.? See CT Income Tax.

    Don’t you love the unintended consequences of liberal/do-gooder policies??

  3. Plainvillian
    Plainvillian says:

    but,… but,… but,… won’t they use those funds to build bus more stops?? Maybe electric car charging facilities??

  4. JBS
    JBS says:

    Let’s see if I got this right??
    ?
    Here goes. By having this program, Congress, with the Zero taking credit for it, effectively created an artificial base value for “clunkers.” This immediately put money in the car dealers’ pockets, fraudulently boosted the assessed value of a “clunker,” junkers and total wrecks, and increased property taxes. The towns, along with MANY others, benefited from this windfall scheme. Pandering perhaps along with transferring wealth from the rich car owners to the bus riders. Further burdening the middle class financially. (Was there a program to help pay the taxes for people too poor to pay their taxes?)
    ?
    WHY do I get the distinct impression that there are a lot of Democrat car dealers and that possibly, just possibly, a lot of vehicle titles (VIN numbers) were turned in for a LOT of money? Whatever agency administered the Clunker Program doesn’t want to see the actual auto. Further, I would bet that most, if not all, of the records are mysteriously gone. There’s a LOT of payoffs here.
    ?
    I smell a rat.

  5. wjmiller52
    wjmiller52 says:

    I just ran into this same?problem. My 2002 Toyota Tacoma (with 180,000+ miles) is valued higher than my sons 2009 Hyundai Accent. I decided to [pay the tax bill in person earlier this week. Went to the tax collector’s office in the town where I live. Recieved the same BS line, “We only collect the taxes, you have to go to thge assessors office to discuss the assessed value”. Well I did that, and the assessor told me that according to the VIN number I have a 6 cylinder (my truck is a 4 cylinder), and have a full extended cab (my truck does not), and “If I have a problem with the way she calculated the assessed value, I can come back later in late August, get an application, and go before the review board and complain”. I have since sent a registered letter to her requesting that I get a complete mathamatical breakdown with the formula she used. Bet I never get that………

  6. sammy22
    sammy22 says:

    Gee, if I saw the value of my car go up, I would be glad that it would have a higher valuation on a sale/trade-in.

    • JBS
      JBS says:

      How simple.?
      ?
      Sell for a dealership for a year, your view of the automobile business will mature. Finesse is exactly what is done to the consumer. New car, used car, clunker, junker, total wreck,? negotiate in your favor ?– L O L !
      ?
      “Cash 4 Clunkers” was a political deal.? And you are paying for it.? Continually.

    • Dimsdale
      Dimsdale says:

      As loathe as I am to admit it, I sold cars for a while when unemployed.? The only one getting “finessed” is you.? A job in car sales is a real education.? I suggest you watch the movie “Suckers” to get an idea.? The first half of the movie may seem ridiculous, but it is pretty accurate in large part, especially the sales meetings.

  7. wildcat
    wildcat says:

    Cash for Clunkers was just one of the many ways this Poser in Chief and his marxist friends used and continue to use to redistribute wealth.? Those that “took advantage” (and I mean this literally as well as figuratively) of this scheme were those who look for “getting theirs” without any consideration of what these schemes mean for fellow Americans or for the Country at large.? It’s all about getting something for nothing or “evening the score”.? Still others who took advantage are just your typical useful idiot….too selfish to bother to notice what is being done to this Country.? Sickening to those of us paying attention…especially since these useful idiots get one vote (possibly more than one in CT) this Nov. that will likely negate my own.

  8. sammy22
    sammy22 says:

    No upside at all? How about a higher property tax on the car results in higher deductible and lower federal tax? Oh, I forgot we are all victims, no escape.

    • Dimsdale
      Dimsdale says:

      How about higher prices for people that need cheap transportation?? ?bama pulled the rug out from under them, as well as those that needed “clunkers” to get parts to maintain their vehicles.

      • Dimsdale
        Dimsdale says:

        So, higher prices and higher taxes for older and older cars.? Sounds like the people that the Dems purport to support are getting the liberal shaft once again.
        ?
        Peeing on their legs and telling them it’s raining.? The liberal credo.

  9. just sayin
    just sayin says:

    (What’re you talking about? ?I roll my eyes every time I read your posts.)
    So you’re fine with having to pay higher property taxes on your vehicle that’s a year older because when you go to sell it (at what ever point), through your finesse, you’ll be able to garner a better price for yourself. ?Goody. ?And you’re also happy ?with the POSSIBILITY you’ll qualify to get back some of that higher tax via a greater deduction (not “deductible”) resulting in maybe a lower federal tax (but likely to be no more than a few dollars).?

  10. just sayin
    just sayin says:

    It also stands to reason that used car values would increase since fewer older cars in the market results in a lower supply than demand. ?Also, a mechanic friend posed the question: what happens to the inventory of new car parts for the older cars, i.e., the clunkers, since the clunkers were destroyed? ?Who will absorb the cost of that inventory? ?Clunkers were destroyed to ensure they would not be re-sold – that was the whole purpose: to get then off the road. ?Likewise, the clunkers would not be in the junkyards for serviceable parts for like-cars. ?Fewer serviceable parts in the junk yards results in higher repair bills because a new replacement part (from the aforementioned inventory) must be supplied vs a less expensive used/re-built part. ?And who is it that pays the higher bill? ?The people who hung-on to the older car including those that could not afford a new(er) vehicle. ?Cash for clunkers… people thought they were getting a deal – but for many people whose eyes were not fully open, the deal wasn’t so sweet where there were loans with interest to be paid, higher insurance costs, and higher property tax. ? ? ??

    • Dimsdale
      Dimsdale says:

      As I said: nobody makes out on the deal, and apparently, even those smart enough to avoid “clunkers” will get “finessed”.? Maybe the mad rush to foreign brands drove GM into the toilet.? What about that?? Most, if not all, of the replacement parts that will be needed that used to come from salvage lots come from outside the U.S.
      ?
      Just more evidence that ?bama’s feelgood “economics” are just the result of his ignorance of economic principles.? Or any principles.

      • JBS
        JBS says:

        Cash 4 Clunkers was a direct result of Obama and the Regime devising schemes to transfer middle class wealth to their cronies. The cover story is saving the planet by removing a few cars. Whoopee.
        Now everyone, from the poor shulnk who just wants a decent ride to and from his/her two or three jobs to the college kid with $200k in Pell Grants, is paying for it. Everyone pays more resulting in the favored and the connected profiting. Continually.
        Just where did that extra $3500 go? Hmmmmm . . .
        ?

  11. JBS
    JBS says:

    The money went somewhere, at least on paper. Here’s a thought from the Follow the Money Department:
    ?
    This is big dollars, so the Regime would try to funnel it to their cronies. At a minimum of $3500 for each Clunker, a hundred, a thousand, dude, more(?), VIN numbers would be worth, you do the math.? Serious dinero.
    ?
    Who controlled this money flow? Car dealers? Democrat car dealers? The apparatchik? How about people who would make that certain contribution to the DNC ??????
    ?
    Hmmmmmmmmmmmmmmmmmmmmmmmmm? Makes one wonder who is going to monetarily benefit from O-care? We have good idea who will lose.
    ?
    I really smell a ‘crat.
    ?

  12. JollyRoger
    JollyRoger says:

    Sammy, you are going to finesse your trade in value about as well as you’re going to finesse the tax assessor!? The best you can hope for is that they will finesse you, but I wouldn’t drop anything and bend over or you’ll need a good shower when you get home!

  13. JBS
    JBS says:

    sammy22, the salient points of the post are that car owners received a de facto tax increase; the automobile/truck market was tampered with by government; prices for used cars, and subsequently new cars, were artificially altered by the Federal government by providing a dollar base for a Clunker. Government interfering with private business never bodes well for the consumer. Or, was government trying to boost the share value of GM stock? Another scheme to consider.
    I am sure the morality and political affiliations of car dealers runs the gamut. My point is that a huge amount of money changed hands. I immediately saw political connections. Everything this Regime does has political ramifications. The Clunker program was a good way for the Regime to funnel government money (and launder money) to a selected, favored few. That those select few could be contributors to the Regime and the DNC beggars the imagination. Contrary to their advertising, Democrats are all about the money.
    There are no coincidences here.
    Good luck buying your next car . . . sammy22?

  14. sammy22
    sammy22 says:

    Conspiracy theory is not my forte. And for goodness sake, aren’t you and the others tired of putting on the mantle of victims? I try to do the best I can with the hand I am dealt. And I recently bought a car. I am happy with it and I don’t know (and don’t really care) if the price would have been lower if the Clunker program had not been around.

    • just sayin
      just sayin says:

      …you don’t care if the price would have been lower? ?Again, I roll my eyes. ?Typical: when the onus falls on the lib, the lib will say, “No problem.”

    • Dimsdale
      Dimsdale says:

      Aren’t you tired of constantly being made a victim by this gangster regime?

      Lucky you that doesn’t have to care how much a new car costs! ?I bet you got the extra firm handshake from the GM!?

  15. sammy22
    sammy22 says:

    Guess what just sayin, I will never know if the price I paid would have been lower if the Cash for Clunkers program had not existed. And that was several years ago, so how did it really get folded into 2012 used car prices?

    • Dimsdale
      Dimsdale says:

      Just use what the towns use: the NADA Used Car Guide.? Of course, the real whacking you get comes from the costs for union retirees etc. built into each car.

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