Pub. 56 2015-2016 Issue 2

30 T exas franchised dealers have become the center of the automotive universe, registering 1,573,000 new vehicles in 2014, and will continue gaining market share for years to come. Texas’ 1,297 franchised dealers in 284 cities and towns represent 8.5% of the na- tion’s new vehicle dealers and 9.7% of the nation’s new vehicle registrations. From 2013 to 2014, Texas new vehicle registrations increased by over 150,000 units which was more than the total new vehicle registrations of 22 states. In other words, Texas year to year increase was more than the total annual sales of states such as Iowa, Utah, Kentucky, Nebraska andKansas. The increase was more than the combined new vehicle registrations of Vermont, Wyoming and Maine. Texas year to year gain exceeded the total annual registrations of almost half the states in the U.S. When compared to California, a state with 12 million more citizens, Texas really shines. California has 180more franchised dealerships than Texas but TADA has more member dealers than California. Texas delivers 1 in 17 per capita each year while California registers 1 in 21 per capita, a huge advantage for Texas. In 2004, California registrations exceeded Texas new vehicle registrations by 866,449 units; in 2014 the difference was 274,477, a swing of almost 600,000 registrations in 10 years. Only six states in the union deliver more than 600,000 new vehicles in a year, so Texas’ annual gain on California in just 10 years represents the annual new vehicle sales of Michigan, one of those six states. The reasons for this shift are many. One is that Texas dealers are really outstanding in serving their customers and community. Another is that we are gaining 400,000 new Texans every year. We also have the second youngest median age in the coun- try with Utah being the only state that is younger, so we have more licensed drivers coming on line every year. Another factor is that the motor vehicle sales tax on the average new and used ve- hicle retailed is $1,500.00 less inTexas than in California. California has a 1% higher state sales tax on which they add a 2% local tax option and there is no trade difference on the calculation of sales tax. The sales tax on a new or used vehicle in California in most cases is 9.25% on the total sales price versus Texas consumers who pay 6.25% less the trade difference. The beneficiary of this very positive automotive retail landscape is the customer who saves money on the sales tax and the state of Texas which makes $1,400.00 on every new and used retail sale. Texas’ 1,297 franchised dealerships send $3.5 billion in motor vehicle sales tax and $400 million in title and license fees to the state every year. This is a greater tax contribution to the state of Texas than that created by oil and gas combined. When you add the $7 billion payroll for franchised dealerships’ 97,600 employees, Texas’ principally family owned new vehi- cle dealers in 284 Texas cities and towns are essential to the state’s economic success.  Record Breaking Texas Dealers