New ICBC Transfer Tax Calculation.

Published Oct 25th, 2022.

ICBC's has a new method for calculating transfer tax on used vehicles. They no longer use the self declared value on your transfer form, they now use the average wholesale price of that vehicle. The main issue is by definition, half the vehicles are less-than-average. This below average group of vehicles are taxed at a higher rate, not representative of the vehicles actual fair market value.

When new vehicles are purchased their quality and value are essentially equal, as they age the value deviates based on many factors that I have listed here on the website. One big factor is how a vehicle is maintained; directly related to whether it is covered under a warranty program. Vehicles with warranty are maintained to a certain standard, and when all vehicles of a certain age are covered their value spread is tight. ICBC's new tax method is less of an issue here, although there are exceptions to this, such as having a rebuilt title which can impact resale value 30-50% on new vehicles.

Once warranty programs expire, the spread in value on vehicles spikes. The quality and health of a vehicle is no longer the dealerships duty, and falls to the owner. As we all know, there are very different philosophies when it comes to caring for an ageing vehicle. Some mechanically inclined owners take on the challenge and perform the preventative maintenance themselves. Others continue to pay the dealership. Unfortunately so many others choose to neglect the regular maintenance and care of their vehicle. As vehicles are neglected for long periods of time, issues form which are not properly diagnosed. They then form small problem which can become big. These problem are inconsistent and spike the spread on older vehicle prices.

Take a hypothetical situation, two of the same cars are purchased, one by the classic example of a little old lady who uses it to get to church on Sunday. The other by a company that offers nursing house checkups. 15 years later the cars both hit the market. One has been used lightly, 80,000km, runs and drives meticulously with plenty of life left. The other at 300,000km is at the end of it's practical life expectancy, has many mechanical issues and overall poor condition caused by non-regular users.

The issue is when these vehicles sell the buyers are both paying the same transfer tax. That's right, ICBC does not even consider the mileage that is put on the vehicles when calculating transfer tax. The buyer of the lesser vehicle must go out of their way to purchase a vehicle appraisal which properly values their purchase. Enter Deal Team Six Automotive Appraisals.

Our mission is to assist private buyers by offering remote, fair and fast appraisals for their purchase. We connect to customers remotely to perform our comprehensive 50 point vehicle appraisals. On vehicles we agree to appraise, we guarantee we can perform our assessment in less than 45 minutes and turn around the paperwork you need to reduce the transfer tax you pay in less than 24 hours.

We began offering this service because be passionately believe in supporting the private vehicle market in British Columbia!

Keep an eye our for our next blogs which will discuss who is most impacted by the new tax and what environmental impacts it has.

Sincerely,

Deal Team Six Automotive Appraisals.