Chris Lethbridge is ticked off about the province’s new rules to determine the amount of provincial sales tax it charges on private used vehicle sales and he’s refusing to accept the policy change without a fight.
The 54-year-old Salmon Arm resident bought a used truck for $2,100 in a private sale in mid-October. He had the seller with him in the ICBC office and together they filled out the transfer of ownership form. When he presented the form to the ICBC agent, he was told the Canadian Black Book average wholesale value of that 2008 Dodge truck was $11,000. That means he will be required to pay $1,320 in PST to register the vehicle in his name.
“The book value is 11 grand; this truck is not worth 11 grand,” Lethbridge said. “They told me I can go get it appraised but I will still pay a higher value.”
The new policy took effect on Oct. 1. Previously, the 12 per cent sales tax charged for any vehicle worth less than $55,000 sold privately in B.C. was based on the sale price, not the Canadian Black Book value which is now being used to determine the tax.
Lethbridge, who just started a job evaluating commercial drivers, says he can’t afford to pay the PST cost and the truck he bought is sitting in his driveway unregistered.
The truck, which has 300,000 kilometres on the odometer, needed brake and exhaust repairs and also needs new speed sensors and has a damaged passenger door. But unless he has it inspected by a licensed appraiser he’s on the hook to pay that $1,320 PST bill. He also was told he could not pay the bill in installments, it has to be a lump-sum payment.
Once he does get it registered he will have 30 days to have it appraised, at his expense, by a licensed inspector and if that results in a reduced value, ICBC will refund the difference.
Lethbridge called two ICBC offices on Friday to find out what they determine the Canadian Black Book value is for his truck and was given two vastly different quotes. One agent told him it was worth $8,300 and the other said it was $13,500.
“Who is governing this black book, does every ICBC office have a different book?” he asks.
The province’s auto insurer had another surprise in store for Lethbridge when he phoned the ICBC office and asked an agent what would happen if his truck was ever written off in an accident.
“My question was, if I pay taxes on the Canadian Black Book value on the truck, if the truck gets written off, what is ICBC paying me?” Lethbridge asked. “Surprise, surprise, they’ll pay me the Edmunds book value.
“We have three books in Canada. The Edmunds book values the truck I just bought at about $3,200. The Kelley Blue Book values my truck at about $8,500. The Canadian Black Book is $11,000. So what is really going on? I call it getting gouged and it’s not just me.”
When it costs more to repair a vehicle damaged in an accident than the vehicle is worth, that’s considered by insurance companies as a write-off or total loss. Jennifer Cook, manager of Sussex Insurance in Prince George, says what typically happens when a vehicle is written off is an ICBC claims advisor will offer the insured motorist a buyout amount based on retail value and if the client agrees they will cut them a cheque.
“They will go online like the rest of us would to Kjijji or Auto Trader or go to dealerships and find out what this vehicle would sell for,” said Cook. “Where people are getting confused is there’s a big difference between average wholesale (the value used to determine the PST) and the retail (write-off) value of a vehicle.
“We do have a black book that we use to find that average wholesale price and that same book will give us a retail value as well. But it doesn’t take into account inflation right now, so I’ve been finding even the retail value is quite often lower than what people are paying (for used vehicles) because everything is so inflated.”
Cook said she had her own vehicle written off in an accident and was not satisfied with the amount ICBC was prepared to pay her in a buyout. So she found three similar vehicles for sale and showed the prices to the claims advisor and received a cheque based on the average of the three prices. She advises other owners of written-off vehicles to do the same.
“You just have to show them what they’re selling for,” said Cook. “I know everybody’s mad at ICBC right now, I get told multiple times a day, so I know.
“I’m not saying they’re fair with their first value always… but at the end of the day, for the most part, they pay off fairly. I agree that sometimes with ICBC you have to do your own legwork. Find three comparable vehicles and show them this is what it will cost me to get another.”
With the cost of buying a used vehicle privately more expensive now in B.C. since the October policy change, Lethbridge is worried for the future of his five sons and seven grandchildren when they start driving, knowing the province’s new PST rule will continue to take a bite out of their wallets.
“ICBC says they are doing it to curb fraud, which I understand,” said Lethbridge. “But if my youngest son decides to buy a car and go to school and he’s living on Kraft Dinner, if he buys a car for $1,200 and if ICBC says its worth $8,000 he is stuck with a tax bill he has to pay on eight grand.
“This is in no way fair. After the last two years everybody has gone through we’re just starting to get back on our feet and now we’re being hammered on this.”
Lethbridge says he can’t afford to pay his PST bill to register the truck and he can’t sell it until it is registered in his name. He’s emailed details of his situation to Kamloops-North Thompson MLA Peter Milobar and federal Conservative leader Pierre Poilievre.
“This is crazy,” he said. “It’s a mess. We’re getting screwed. This tax law doesn’t feel right at all.
“I’m wiling to poke the bear all day long. I’m going to rock the boat on this one.”