California Laws Make Buying A Vehicle More Expensive

California Governor Jerry Brown has unveiled a new plan intended to generate revenue by raising taxes. One of the ways in which Gov. Brown’s taxes generate money is by adding a $65 car tax. That per-vehicle tax is in addition to a six-cent gas tax and 11-cent diesel fuel tax. This new tax comes despite a recently unveiled $160 billion state budget that apparently didn’t address transportation costs adequately.

The $65 per vehicle fee would be assessed during vehicle registration, thus new or used vehicle buyers would be on the hook to pay $65 for vague transportation costs. While that number may appear small and even smaller when added into an auto loan, it’s meant to add up. California hopes to create the tax in order to raise $2 billion in new revenue for transportation projects. However, in the end it does make it slightly more expensive to own a vehicle in a state where vehicle costs could keep rising.

Senate Bill 350, which aims to reduce oil usage by 50 percent, only adds to current California regulations. The association of global automakers stands in strong opposition to SB 350 and its goal to reduce oil usage by half. Automotive News reported that the association of global automakers only sees the 50 percent reduction of oil possible if by the year 2030 100 percent of vehicles sold in California are zero emissions. Electric vehicles are expensive. Requiring that dealers sell more and more of them while having the government add a tax on top of it could have a negative impact on retail auto in the state of California.

What kind of pressure will California dealers feel if they are required to sell vehicles that cost more and the state is slapping taxes on top of that? Do you agree with California lawmakers and their goal to reduce oil usage by 50 percent? Finally, should the $65 vehicle registration tax be viewed as a small fee, or a slippery slope that could negatively impact California dealers?