It has been well documented by a number of sources that vehicle values have rebounded smartly from the depths of the financial crisis, when all consumer and business spending was in lock-down. Because of the restructuring of the auto industry, no longer are there more new vehicles produced for sale than there are people who want to buy them. Because of this, transaction prices are much higher now and used car and truck prices are also transacting higher as a result. It is simply supply and demand working in a free marketplace.
A number of states utilize our valuation services in order to determine fair market value so they can fairly collect taxes for their citizens, thereby providing the services these taxpayers expect. All of those taxing jurisdictions saw their personal property revenue drop along with the dramatic drop in vehicle values. Due to the fact that vehicle values have rebounded year over year, many constituents are seeing tax bills higher than they did a year ago. They saw a drop in their personal tax bill the previous year and now their tax bill went up to reflect the new realities of the marketplace.
When prices go down we reflect that and when they go up we reflect that. The dramatic swings in car and truck prices were unprecedented. However, that said, the market is normalizing where we will likely see a return to steady depreciation as has been typical in the past.
One recent article was written to help explain why people’s tax bill went up this year. We thought it particularly well done so have provided a link to it here: