Autoland, CUDL Debate Effect of Calif. Sales Tax Increase on Auto Lending
The credit union auto CUSO that offers direct loan financing from its credit unions saw a 54% increase in sale volume from February to March, which was a 20% jump from the same time period last year.
While this is the normal peak season, Autoland President Mark Chandler said that incentives combined with the urge to beat the one-percentage-point sales tax increase that went into effect on April 1 and an impending increase in license fees coming up on May 19 caused a push over the past month.
"Consumer confidence is up and it feels like car buying is back in the air," Chandler said.
Autoland ran a special marketing campaign over the past month to encourage consumers to make their auto purchases before the tax went into effect. The CUSO had flyers along with e-mails going out to consumers.
The e-mails promoted the services that Autoland provides such as negotiating price, car delivery, a full-service Web site and taking trade-ins. The bottom of the e-mail highlighted the sales tax increase and noted that Autoland can also pass along cash incentives that manufacturers are now offering.
"I have confidence going forward that we've hit rock bottom and that things are going up," Chandler said.
California-based indirect lender CUDL said that while they noted a minor uptick in the number of vehicles funded by credit unions in California between February and March, they saw similar numbers during the same time period in 2008 not only in California but nationally.
"We typically see somewhat of a seasonal swing during this timeframe, where March has greater activity than February, so it is difficult to attribute what we're seeing between February and March to the anticipated sales tax increase in California," said Bill Meyer, communications coordinator for CUDL.