Car Values for Tax Assessment Purposes


Section 58.1-3503(A)(3) of the Code of Virginia specifies that for most vehicles, the value shall be taken from “a recognized pricing guide.” According to the Weldon Cooper Center for Public Service with the University of Virginia, “For valuation of automobiles, all localities use the National Automobile Dealers’ Association’s Official Used Car Guide (NADA) as their primary valuation guide for cars and sport utility vehicles. When a vehicle is not listed in the primary guide, the locality obtains values from some other source. All cities and counties in Virginia levy this tax on motor vehicles.” In all Virginia localities, the Car Tax assessments are based on the value as of January 1st (Virginia Code, Section 58.1-3515).

Localities are allowed to use the pricing guide values that include all applicable adjustments, or just use the base value for vehicles specified in the guide. Localities are to use either average retail, wholesale (or trade-in), or loan value, so long as these values are applied uniformly within classifications of property.

Like all other localities, Fairfax County obtains car values from the Eastern Edition of NADA’s Official Used Car Guide. Specifically, the Department of Tax Administration (DTA) uses the clean trade-in value published in the January edition of the pricing guide.

DTA will consider adjustments for high mileage, and for condition under appeal.

For new model year vehicles, the assessed value is based on a percentage of MSRP. NADA Guide values are used for subsequent years. Discounting from the MSRP provides a uniform assessment for each class of new model vehicles, and generally provides a reasonable but conservative depreciation curve when compared to the values in next year’s pricing guide.

2012 Car Values

Vehicle depreciation from one year to the next is the norm, and this remains true for the vast majority of vehicles assessed in Fairfax County for 2012.  However, the National Automobile Dealers Association’s (NADA) valuation guide as of January 1, 2012 does in fact show some value appreciation (increase) in certain vehicle segments.

Since the U.S. economic recovery began its slow climb in 2009, nationally new vehicle sales have averaged 29% lower than pre-recession levels. The decrease in new vehicle sales impacts used vehicle supply, since the number of late model used vehicles in the market depends on new vehicle sales.  NADA estimates that the supply of used vehicles ranging up to five years in age has dropped every year since 2009 – and that supply through 2011 was about 17% lower than it was in 2008.

In times of economic instability, used vehicles become more attractive than new, and the negative shift in used supply has coincided with strong demand growth. These trends have helped boost used vehicle prices. As a result, the assessed value of certain vehicle models actually increased as of January 1, 2012.

The trend continues and NADA forecasts used vehicle prices will continue to increase through December 2012 with the largest gains in price coming in the second half of the year due to ongoing improvements in the U.S. economy.  This may again impact the assessed value of certain used models as of January 1, 2013.  [Source:  NADA Use Car Guide]   

Vehicle assessments can be appealed based on vehicle condition or high mileage as of January 1st:  If you have valuation questions, please e-mail or call 703-222-8234.

Tax Calculation

Local car tax bills are a function of the tax rate times each $100 of assessed value. In other words, take the value of the car as assessed by DTA, divide by 100, and multiply the result by the tax rate (which is $4.57 for most vehicles).

For personal use vehicles, a substantial part of this bill is then subsidized by the state’s Car Tax Relief program. The amount of subsidized relief is stated on each bill as applicable.

Questions? E-mail
or call DTA at 703-222-8234.

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