Loudoun Commissioner of the Revenue Robert S. Wertz Jr. issued a press release Thursday, warning that people could see an increase in their car tax bill—not because taxes have been raised, but because the value of used vehicles has increased during the COVID-19 pandemic.
Typically, vehicle values drop over time as the vehicles age—meaning each year, the tax bill on that vehicle, which is based on its assessed value as of Jan. 1, would go down. But during 2020, according to Wertz, COVID-19 has altered the usual trends, and all major vehicle valuation services saw vehicle values increase between January 2020 to January 2021. Over the summer of 2020, prices across the U.S. used car market as a whole climbed 10%.
Several things contributed to that, according to the commissioner. In March 2020, the Federal Reserve cut interest rates to nearly 0%, allowing people to buy vehicles sooner than they may have in the past. That resulted in strong demand, which pushed prices up.
Additionally, COVID-19 saw some auto manufacturing plants redirected to producing ventilators and personal protective equipment, which cut into new car inventories, further tightening the market. And companies like car rental businesses with large vehicle fleets put off replacing their inventory—meaning they held onto vehicles which they otherwise would have sold off into the used car market, contributing to the supply shortage.
“My office assesses personal property on the assumption that it is in fair condition for its age,” Wertz stated. “A vehicle owner can request a review of the assessment if a vehicle is not in average condition as of January 1 of the tax year being appealed, because of unusually high mileage, extensive unrepaired body damage or serious mechanical defects. This does not include normal wear and tear.”
Vehicles will see varying changes in value based on factors like model year and trim package; Wertz offered examples ranging from a 2020 Ford F150 Raptor EcoBoost appreciating by $8,279 to $58,850 in 2021, to a 2015 Honda CR-V 4D EX-L 2WD appreciating by $525 to $13,800.
The personal property tax, $4.20 per $100 of assessed value, hasn’t budged in decades. There is car tax relief available for elderly or disabled people and veterans, among others. More information is at loudoun.gov/taxrelief.
Vehicle owners who believe their vehicle was worth less than its assessed value on Jan. 1, 2021, can find an appeal form at loudoun.gov/pp-appeal. For more information, go to loudoun.gov/cor or send an email to firstname.lastname@example.org.