Attention Citizens of Colonial Heights from Commissioner of the Revenue Bill Feasenmyer.
Recent reports from other localities across the Commonwealth that are preparing personal property tax bills now, have noticed an increase in used car evaluations over last year for the same vehicle. The normal occurrence is for used car values to go down approximately 10% each year. Almost every locality in the Commonwealth uses the National Automobile Dealers Association (NADA) used car values to apply assessed values to passenger vehicles and pickup trucks. While we will not be getting our NADA evaluations until March or April, we are obligated by State Code as a non-prorating locality, to use the assessed value on January 1, 2021. A combination of COVID-19 influences on the new and used automobile markets as well as the year long low price of fuel has contributed to this occurrence. Below is the NADA summary of why this is occurring.
Under normal market conditions, the observed year over year value increases would be unusual. Unfortunately, the covid-19 pandemic has made the current auto market anything but usual. Just over the Summer of 2020, prices increased over 10% for the US used car market as a whole. This was simply due to demand outpacing supply, which occurred both as a result of large fleet companies holding on to their inventories longer and factories being temporarily closed, as well as other micro and macro-economic factors. This phenomenon has been observed in every segment of the used car market. In fact, these year over year price increases are much more prevalent and far more massive in the pickup truck segments vs. the market in general.