B.C. used car buyers furious over provincial tax changes that have them paying more

Instead of driving the 2008 Dodge Ram pickup truck he purchased in a private sale last month, Chris Lethbridge has it parked, uninsured, at his home in Salmon Arm, B.C.

If the truck gets damaged or stolen, he knows he won’t be able to file an insurance claim. Nonetheless, there it sits with no financial protection on it and no additional kilometres rolling on the odometer.

“It’s an $11,000 paperweight sitting in my driveway,” Lethbridge told CBC’s Daybreak South. “And I’m not the only one in the province who’s dealing with this.”

On Oct. 1, a new provincial regulation around the sale of private vehicles came into effect.

Instead of paying 12 per cent provincial sales tax (PST) on the actual sale price of a vehicle at the time of purchase, buyers must now pay PST at the time of registration — with the tax based on the vehicle’s average wholesale value in the Canadian Black Book valuation guide.

That has Lethbridge, and others like him, upset and calling for action.

Lethbridge says he paid $2,100 for his Dodge Ram in a private sale. But when he went to register the vehicle, he was told by the insurance agent it had a Canadian Black Book value of $11,000, and he had to pay PST on that amount.

“I was a little bit dumbfounded,” Lethbridge said.

Lethbridge said he obtained a temporary operating permit so he could drive the truck from nearby Kamloops, where he made the purchase, back to Salmon Arm.

With the truck now gathering dust, Lethbridge says he has been trying to find a satisfactory resolution to his situation.

“There has to be a light at the end of the tunnel. There has to be.”

Changes bring B.C. in line with other provinces, says government

The provincial government says it made the change to prevent buyers from understating the vehicle purchase price in private transactions and then paying PST on those lower numbers. That loophole, it said, could create an annual PST revenue shortfall of close to $30 million.

Buyers who want to dispute the list value can hire a qualified appraiser to assess their vehicle’s value and present the appraisal to the Insurance Corporation of B.C. (ICBC), the provincial auto insurer, at the time of registration.

The guidelines state that if the appraised value and the price paid are both less than the average wholesale…