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I-695 backers leave support at home
I-695 backers leave support at home
A chance to save money delays car registrations, slows sales
Thursday, October 7, 1999
By ROBERT GAVIN
SEATTLE POST-INTELLIGENCER
CAPITOL CORRESPONDENT
OLYMPIA -- After you retire, says Jack Frazier, every dollar counts. You try
to save a little here, make a little there. You might pick up some part-time
work, maybe invest in the stock market.
Frazier might have found another way. Rather than renew his license tabs this
month, he's taking his 1995 Jeep off the road, sharing a car with his wife while
waiting to see if Initiative 695 passes in November. If it does, he'll renew
the tabs in January, pay $30 and save himself a cool $550.
"I just like to figure angles to make a buck . . . and this is better than
the market," said the Woodinville retiree. "I let the car sit in the garage
for two months and I make $550. That's $50 a week and it's non-taxable."
Frazier is one of many Washington residents trying to find an angle to beat
a widely despised tax. With polls showing support for I-695, car buyers are
delaying purchases; newcomers are risking big fines rather than immediately
register cars and those with year-end renewals -- an estimated 1.4 million over
three months -- are considering mass transit.
I-695 would eliminate the state's motor vehicle excise tax, replacing it with
a $30 annual fee.
Many motorists would save hundreds of dollars, with the average car owner
saving about $145, according to the state Office of Financial Management.
Mark Varadian, a Department of Licensing spokesman, said it's perfectly legal
for owners to delay renewing license tabs and paying the tax, as long as they
keep the car off the road. If I-695 passes, they could wait until Jan. 1, when
the law would take effect, and pay just $30.
"As long as you don't drive," Varadian said. "If you drive, then you get nailed."
Driving with an expired registration can bring a $71 fine within two months
of the expiration date, and $157 after two months, according to the Washington
State Patrol.
Newcomers have 30 days to register cars in Washington or face a penalty of
at least $350. If found to be using out-of-state plates to avoid Washington
taxes, the penalty can go as high as $10,000, the State Patrol said.
Varadian said I-695's early impact is unclear because data on excise tax collections
and cars coming in from other states in the past two months is not yet available.
But few doubt the measure is costing the state money -- at least in the short-term.
Car dealers say some potential buyers are postponing purchases in hopes of
saving hundreds of dollars if I-695 passes.
With taxes due at the time of purchase, many dealerships expect a lean November
and December should I-695 pass on Nov. 2.
"If people hold out until close-outs to save money, why wouldn't they wait
another month or so," said John Collins, used car manager of Sound Ford in Renton.
Some dealers say they've been able to overcome buyer hesitation with incentives,
such as low financing charges and four-figure rebates.
Mark Minium, general sales manager of Burien Honda, said he's closed a few
deals by offering to refund the tax should I-695 pass.
"All but the 30 bucks," he added quickly.
Minium said he's lost little business because of the initiative, though he
recalls one customer, a veterinarian, who delayed buying a $30,000 sports utility
vehicle for the chance to save $1,600.
Other dealers -- particularly those of luxury cars -- blame I-695 for a significant
drop in business. Brian Lanning, sales manager of Leskovar Lincoln-Mercury Jeep
Oldsmobile in Kennewick, said he's seen sales drop from more than 100 cars a
month to slightly more than 80 since I-695 made the ballot.
Brandon Johnson, sales manager of Ken Easley's Olds/Cadillac in Shoreline,
estimated sales are off at least 10 percent.
"It's a definite. People are waiting," Johnson said.
"The people who earn a lot of income say, 'Let's wait six weeks and save ourselves
$1,000.' They have nice cars, and they can wait."
Barely a day passes at Bill Hazelett Chevrolet in Kent without a customer
suggesting he'll wait until November to take the plunge, said Bill Hazelett,
owner and general manager.
"Luckily," Hazelett said, "September was real good."
Most car dealers said they support I-695, and expect to make up any short-term
losses in January if the measure passes.
Minium, of Burien Honda, said limiting the excise tax could add $20,000 a
year to his small dealership's bottom line -- but he'll probably vote against
I-695.
"From the business standpoint, it could be real good," he said. "But as a
local boy, I don't want it to hurt the municipalities."
Frazier, whose Jeep will be in
the garage at least until Nov. 3,
figures he already pays enough taxes. The chance to cut his bill is well
worth any inconvenience from sharing a "little Chrysler" with his wife, Vivian.
"When my wife reminded me to get tabs, I thought, 'I can sit a few weeks and
see what happens,'" he said.
"If it doesn't pass, I renew my tabs in November. If it passes, I sit tight
until January. I can save $550, and that's damn good money."
