Why are Alabama car tag prices so high this year?
BIRMINGHAM, Ala. (WBRC) - If you’ve noticed that you’re paying a lot more to renew your car tags this year, you’re not alone.
And it’s not just on newer cars, but vehicles you’ve owned for years.
So, what’s behind the increase and will those prices be coming down anytime soon?
The standard fee for an Alabama license plate is $23 plus a small issuing fee, but the part that’s driving up the price of your car tag is the market value of your vehicle—the newer the model, the more you’ll pay.
But the COVID-19 pandemic has also played a major role in the price of your tags.
Normally, you’d expect to pay less each year for your car tag because most cars depreciate in value over time.
But supply chain issues brought on by the pandemic slowed car manufacturing causing the price of used cars to skyrocket.
That means your older model car is worth more now than it was pre-pandemic.
Tom Dart with the Automobile Dealers Association of Alabama said your city’s ad valorem tax hinges on the fair and reasonable market value of a vehicle, which is only updated once a year.
“The way it works, on October 1, so the October 1 of 2022, the Alabama Department of Revenue takes a snapshot of the value of every vehicle in the state, and then that amount is used for the following year for that component of the car tags,” Dart explained.
“So, and of course with COVID, and the big supply shortages that everybody is seeing with motor vehicles, the price of used cars shot up. This is the unusual situation now where it is affecting car tags,” he said.
Dart added that the price of cars is starting to come down slightly, but they are still high.
So, car tag prices will likely remain high for at least the next several months until the department of revenue takes another snapshot in October.
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