Car Sales in High Gear on Eve of Tax Increase

Sunday was a great day to be a car salesman.

Showrooms throughout the Southland were abuzz with customers hoping to save some cash on the day before a statewide 1.25% sales tax hike goes into effect.

In most areas, the levy jumps to 7.25 cents on the dollar today, but consumers in Los Angeles County will pay even more--8.25 cents--because a higher local sales tax is already in place.

For an industry that has taken a heavy recession beating, it was like the first big rain after a long drought. Many car dealers said sales were up 35% to 45% compared to a typical weekend.

“It’s been the best weekend since before the (Gulf) war,” said Doug Swaim, general sales manager for Valencia Dodge Isuzu. “Those that have been in the business long enough say this is the way the car business used to be. This is a lot of fun.”

Swaim said his team of 12 salespeople sold 21 cars over the weekend, compared to the usual 14 or 15.

Other items were also moving fast Sunday, as thrift-minded customers found it best not to procrastinate on furniture, appliance and other “big-ticket” purchases.

“We’ve had an extremely good day today,” said Gwin Landry, assistant manager of a Barker Bros. furniture store in Torrance.

Landry’s store attracted 120 customers Sunday, twice the usual number, and sales doubled, he said. The chain’s other 10 stores in the Southland were so busy, he said, that their fax machines transmitting financing information experienced overload.

But it was car dealers who seemed to reap the most benefits. Dealers said many on-the-fence buyers decided to open their checkbooks to save anywhere from about $100 to as much as $1,000 on a new car. Some motorists even wanted to prepay large repair bills, dealers said.

“We probably pushed at least six or seven people here over the edge to go ahead and do it now instead of waiting,” said Andrew Ruffner, finance manager at Vasek Polak in Hermosa Beach, which sells BMWs, Porsches, Audis, Volkswagens and Saabs. “I would say we’re up about 100% in sales in the last two days compared to last month.”

Of course, dealers, too, were quick to remind potential buyers of the impending tax hike.

“This weekend! Don’t pay more! Save $$,” read newspaper ads placed by Valencia Acura.

Not surprisingly, much of the last-minute buying bonanza occurred at luxury car dealerships.

Indeed, a customer paying $23,000 for a 1991 BMW 325 on Sunday spent $287 less than he would today. And loan payments on a car bought Sunday at Walter Reuff Buick in Mission Hills would be about $6 less per month than after the tax, for a total savings of $360 over 60 months, according to sales manager Rick Adams.

But even some sellers of mid-line cars fared well. Galpin Motors in Sepulveda, one of the largest Ford dealers in the nation, sold 41 cars on Saturday and Sunday, 25% more than usual, general sales manager Shea Shafer said.

But not all car-buyers were peeling rubber to get to the closest dealership.

“A person who gets into a $30,000 to $40,000 automobile, they could care less about a $120 difference in the sales tax,” said the manager of a Porsche dealership in Norwalk.

Steve Becker, a salesman at La Torre Volkswagen in Reseda, said many customers expressed satisfaction at the thought of depriving the state of taxes.

“Whether it’s $100 they save or $200, the attitude is, ‘We’re getting to them for once. They aren’t getting to us,’ ” he said.

But dealers’ enthusiasm was dampened somewhat by the fear that Sunday’s splurge will be wiped out today.

“We’ve had a 50% increase in business today,” said John Max, general manager of BMW Valencia. “We’ll probably have a 50% decrease tomorrow.”

Times staff writers Mayerene Barker, Phil Sneiderman and Steve Padilla contributed to this story.