There will almost certainly be another bailout of the car industry, which is having a time selling new cars to people who are out of work because of the government – not “the pandemic,” it’s important to parse. WuFlu hasn’t kept anyone locked down or taken away anyone’s right to work.
At any rate, the point is that the unemployed, the broke and those worried about being either are not likely candidates for a new car loan. But there is another disincentive that keeps people who aren’t unemployed or broke from buying a new car – and it comes from the same source as the impoverishing and unemploying of the populace – i.e., the virus that is the government.
Which serially taxes the ownership of new cars – thereby discouraging numerate people from owning them.
This is the property tax applied to cars – in the same manner as the tax on homes and land except largely avoidable by not buying a new car or owning one remotely new.
Both taxes are levied on the basis of the assessed (by government) value of the thing but unlike real estate, cars always depreciate and this fact makes it possible to greatly reduce the amount one . . . “owes.” Fascinating stuff, the way government can not only take your money anytime it likes and as much as it likes but also assumes the moral right to do so.
How in the world did we get to the point that we “owe” money for things we didn’t buy, don’t use and didn’t ask for? On things we already paid for.
Sales, title, registration and gas taxes among the several.
But there’s an out . . . if you drive something that isn’t worth much. Then they can’t tax it very much. Or at least, they don’t . . . yet.
This can save you literally thousands of dollars – which money you can use to pay off what you . . . “owe” the government (so it claims) each year to be permitted to live in the house you thought you owned, having paid the seller or lender in full for it.
It’s a way of getting the government to steal from itself. Or at least, to steal a bit less from you.
But it also steals from the car companies in a less visible way. How many new cars aren’t sold – even before government stole people’s right to work and earn a living – because of the reluctance of buyers to pay a tax they can largely avoid – by avoiding the purchase of a new car?
Virginia is one of several states (about half of the states) that serially steals from car “owners” – in air quotes to emphasize the cruel misuse of language – every year using the open threat that it will steal the car if the owner doesn’t hand over what he “owes.” This being the relationship of owner and renter – but never mind the verbiage.
The fact remains. “Own” a car in Virginia and other states that tax property in this manner and you will only be allowed to possess it so long as you keep current with your payments.
In Virginia, which has among the highest of these taxes, the amount you “owe” averages about $4 for every $100 of assessed value.
Thus the “owner” of a new car with an assessed value of $30,000 or so – which is less than the average price paid for a new car these days – will “owe” the government (so it says) north of $1,000 in additional (post-sale/beyond-registration, plus gas) taxes and not just this year but next year and for several years to come – until the car has lost most of its assessed value.
Factor that over the six years it takes to pay off the typical new car loan. It’s quite a bite – amounting to as much as ten percent of what you paid for the car by the time you pay it off… the additional 10 percent going to the government.
Unless you let depreciation pull out the teeth.
It takes about 8-10 years for a new car to be worth about half what you paid for it. In the meanwhile, you will have also paid out enough to have bought yourself a used car – or most of one.
And paid a fraction of what they say you “owe” in order to “own” it.
This is why I drive a nearly 20-year-old truck rather than a new one. Well, it is one of the reasons why I drive a 20-year-old truck rather than a new one. Other reasons include no driver “assists” and only two air bags (rather none) but that’s another rant.
I still ”owe” on the truck, of course – even though I paid for it in full some 12 years ago. But I pay a great deal less than anyone who buys a new truck – about $60 annually these days vs. four or five times that much, at least, were I to buy a new equivalent truck.
Which is strong inducement to not buy a new equivalent.
Taxes are like termites. They undermine and destroy. They are the natural enemy of growth and the ally of stagnation. Why build what one knows will be eaten almost as fast as it can be built? Just as government steals, those who create what is stolen try to limit what is stolen. Especially when they have the option to avoid the stealing.
It would be interesting indeed to calculate how many new car sales are lost to new car property taxes. One way to find out would be to eliminate this especially obnoxious tax, which (like the real estate tax) affronts the very concept of ownership by making such a thing literally impossible as it is risible to describe anyone as the “owner” of a thing who is obliged to make payments on a thing. Such a person is being allowed conditional possession and use of the thing, which is a very different thing than ownership.
Imagine it – actually owning the car you paid for.
It might provide a stimulus for people to buy them.
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