New-car dealers are busy in the final days of the summer buying season, but around here, they see little evidence that the increase in the state sales tax - which takes effect Sunday - is helping to drive deals.
New-car dealers are busy in the final days of the summer buying season, but around here, they see little evidence that the increase in the state sales tax — which takes effect Sunday — is helping to drive deals.
“We’re just getting a lot of traffic on moving our ’13s,” said Doug Krieger, co-owner of Krieger Ford on the North Side, referring to his 2013 model year vehicles.
Last year at this time, the demand exceeded Ford’s ability to supply him with cars. This year, the inventory is in line with demand, which is leading to a big sales month, he said.
August is usually one of the busiest months of the year for new-car dealers, boosted by clearance pricing on the vehicles that are being replaced by a new model year. Last year, August was the top month of the year in central Ohio, with 6,892 units sold, according to Autoviewonline.com. In the first seven months of this year, sales are up 10 percent from 2012.
Across the country, December has been the monthly sales leader for three years running. The last time August was on top nationally was in 2009, when the government’s “Cash for Clunkers” program led to a sudden increase.
Starting on Sunday, the state sales tax will increase 0.25 percentage points, to 5.75 percent, which would add $75 to a $30,000 car purchase.
Has this affected car sales? Not much.
“I really can’t say we’ve seen a big change one way or another,” said Keith Dennis, co-owner of Dennis Imports on the North Side and Dennis Hyundai on the Northwest Side. “(Sales have) been pretty consistent.”
The exception is Midwestern Auto Group, the Dublin dealer that sells an array of luxury brands, from Volvo and BMW to Ferrari and Lamborghini.
“When you’re dealing with cars that are $100,000, a quarter percent is not a lot, but it’s enough to make people move sooner rather than later,” said Justin Bay, director of business development for the dealership.
“August is traditionally one of the busiest months in the summer buying season, and this is just another reason to get a deal done,” he said.
Krieger can see how the tax increase would matter more for high-ticket vehicles, but he doesn’t think it would be a significant factor.
“If you’re squabbling over $500 and you’re buying a $100,000 car, you’re in the wrong showroom,” he said.
He also sees little evidence that customers are aware of the new sales tax.
“I think people kind of forgot, it passed so long ago,” he said.
The increase is so small, he wonders if customers will notice, even on a big purchase such as a car.
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