By Howard Fischer Capitol Media Services
PHOENIX – Have you thought about buying one of those all-electric cars?
How about a natural gas powered one?
If you act around Christmas, you could save a lot of money, if not now, later. And that’s because Arizona is changing the rules about the price you pay to register your alternative fuel vehicle every year.
Simply put, it’s going to get more expensive – but not for those who already own one by the end of this year. The change is the culmination of years of efforts by some lawmakers to raise more money to build and maintain Arizona’s highways. But with raising the tax on gasoline a no-starter policy, it has left the more acceptable – albeit less financially lucrative – idea of making clean vehicle owners pay their fair share. In Arizona, vehicle registration fees are based on 60% of the original purchase price, with a tax rate of $ 2.80 for every $ 100 of assessment.
So if your new vehicle has a manufacturer’s base retail price of $ 30,000, its assessed value for the first year of registration is $ 18,000. And the fee is $ 504.
But the estimated value of an electric vehicle of $ 30,000 is 1% of its total base retail price. So that translates to $ 300.
Add to that a tax rate of $ 4 for every $ 100 of assessed value, which leaves the owner with an annual registration fee of $ 12.
All of that starts to change next year.
The law begins to come into force on January 1, with fees being set at 20% of the initial purchase price. So that same $ 30,000 vehicle, purchased next year, has an appraised appraisal of $ 6,000 and a registration fee of $ 240. And from 2023, the fee calculation method is equalized, which means the same $ 504 charges regardless of how the vehicle is powered.
But here’s the thing.
To make the change more palatable, lawmakers agreed to what amounts to a grandfather clause. Simply put, if you own one of what the state considers an “alternative fuel” vehicle in your name by the end of this year, you can keep that 1% appraisal ratio.
Forever – or at least for as long as you own the car or truck.
The same goes for those who buy a vehicle in 2022. This 20% valuation ratio remains in place even when the law changes in 2023.
And this end of year date is firm.
If you are buying from a dealership, the Motor Vehicle Division will accept the date of the temporary registration permit as the official registration date, even if you do not yet have your registration plates.
But if you are buying from someone else, the documentation for a new title must be processed at an MVD office or authorized agent before January 1 to qualify for the lower rate, regardless of when you actually purchased the title. vehicle. And what’s important this year is that the MVD offices will be closed on Friday, December 31st to observe New Years Day.
However, what won’t affect your tax rate is paying off your car loan and removing the lender’s name from the title.
For the record, MVD defines eligible alternative fuel vehicles as anything that can be powered by electricity, hydrogen, solar energy or natural gas, whether it is compressed or liquefied petroleum. Hybrid vehicles equipped with gasoline engines, regardless of their size, are not eligible.
The agency reports that there are currently about 63,000 alternative fuel vehicles in Arizona out of about 7.44 million vehicles registered in total. Of those 63,000, MVD reports that approximately 41,000 are electric.
Environmental concerns aside, there are other reasons to switch to electricity, with gasoline approaching $ 4 a gallon and the price of natural gas unpredictable.
And there is something else: Regardless of when an alternative fuel vehicle is first registered, MVD will issue a special license plate that will allow access to HOV lanes at all times, regardless of the number of passengers in the vehicle.
There is, however, another factor that needs to be taken into consideration: it’s just an expensive time to buy a new vehicle. The price of many cars and trucks – regardless of how they are powered – has gone up, largely due to supply chain issues that have left manufacturers without some of the parts they need. Last month, Tesla announced a new round of price hikes for some of its vehicles.
Autoweek reported that the Model 3 is now priced at $ 43,900 for purchase, up from $ 2,000. A similar increase hit the Model Y which now has a base price of $ 56,900.
And for those who ordered the Model S that has yet to be produced, prices this year were as low as $ 69,420. The new figure starts at $ 94,990.
It’s not just an alternative fuel vehicle problem.
Kelly Blue Book reported that the transaction price for the average new vehicle hit $ 45,031 in September, an increase of more than 12% over the past year.
On the flip side, there is reason to believe that prices may drop for those who wait – and not just assuming these supply chain issues are resolved. Car and Driver and Automotive News claim that the cost of those electric car batteries which make up a large part of the cost of these vehicles is expected to drop in 2023 and beyond, to the point where the cost of these cars and trucks becomes comparable to that of those fueled by gasoline.
On Twitter: @azcapmedia