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Iowa car dealers battle fee hike proposal

Posted on: 2:01 pm, December 2, 2013, by , updated on: 06:47pm, December 2, 2013

Iowa needs millions of dollars for road repairs. But a plan to hike new registrations on cars and trucks could cost Iowa buyers hundreds of dollars.

IDOT is pitching the idea to fix the crumbling infrastructure, but car dealers say it’s not the best option.

“It’s really adding a significant increase in the price of a vehicle for a customer,” said Drew McEleney, general sales manager for McEleney Chevrolet in Clinton, Iowa.

McEleney is part of the Iowa Auto Dealers Association, which is lobbying state lawmakers to oppose the plan.

If approved, the fee would climb from 5% to 6%. That could raise $60 million each year, but dealers warn there’s a greater price to pay.

“That could cause folks to go across the river to buy out of state,” McEleney said.

After bouncing back from recession, Iowa car dealers can’t afford another setback. They say that the fee proposal would be bad for business.

If Iowa approves a higher fee, it could discourage car buying in the Hawkeye state. Customer Gordon Vos is thinking about that scenario.

“Anytime you raise taxes or raise fees on something, it’s going to make people second guess,” he said. “Could I get it someplace else?”

Iowa dealers suggest a gas tax hike would be fairer. That’s because it’s more of a user fee paid by all drivers to repair roads.

“The last thing we want to do is stall the sale of automobiles here in the state,” McEleney concluded.

2 comments

  • leon brshneff says:

    You pay the sales tax in what ever state you register the car in, this story has not been researched for facts very well.

  • Aaron says:

    The increase is on the registration fee, not the tax. You are correct, though the opposite way. The fee is determined by your state of residence, since that is where the car has to be registered. The only way to avoid the fee is to move, not shop elsewhere.

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