Oldest used car IPVA has a higher high in 2022; see comparison

The owner of a 2017 Hyundai Creta, psychologist João de Brito Marques Filho, 67, will pay BRL 2,800 in IPVA (Automotive Vehicle Ownership Tax) this year, almost 22% more than the BRL 2,300 paid last year.

“The price of gasoline is out of the ordinary, and now this increase in tax. I’m really outraged,” he says.

Amid a scenario of scarcity of new and used vehicles with prices inaccessible to the majority of the population, used cars – as models with four years of use or more are classified – were the most valued in 2021. Consequently, they had the highest tax increases.

The prices of models between 2011 and 2017 rose by more than 21%, on average, according to a survey by consultancy Cox Automotive based on data from the KBB (Kelley Blue Book) rating platform.

Used cars (2018 to 2021) rose 15%, while the 2019 to 2022 models that left the stores still brand new had an appreciation of 8.29%.

The IPVA rates are applied on the average sales value. In São Paulo, the calculation made on the estimate of the research carried out by Fipe (Fundação Instituto de Pesquisas Econômicas) resulted in an average increase of 21.99% for automobiles.

The increase is greater than the yield of some of the best investments of 2021. Nasdaq, the American stock exchange that brings together technology companies, rose 21.39%, for example.

Fonte: Cox Automotive/KBB

The Covid-19 pandemic is one of the explanations for the problem. The stoppages adopted to face the virus and changes in consumption habits have led to a series of disruptions and distortions in global production chains, with emphasis on the supply of semiconductors.

“The transformation from analog to digital processes occurs in several areas. The automotive sector has been undergoing a major transformation, which is the increase in vehicle connectivity, and this demands semiconductors”, says Antônio Jorge Martins, coordinator of the automotive courses at FGV​ .

If, on the one hand, zero-kilometer cars were lacking, on the other hand, new and used models available on the market were inaccessible to an impoverished population during the crisis deepened by the pandemic, according to Martins.

“The search for older cars is also the result of society’s loss of purchasing power”, he says. “The pandemic causes the loss of purchasing power and, in order not to pay exorbitant prices, the consumer sought cars with the lowest price”, he says.

A report by Fenauto (National Federation of Associations of Automobile Dealers), which represents used and used car dealers, pointed to 15.1 million cars sold in 2021. The result is 17.8% higher than in 2020.

Compared to 2019, a year without a pandemic, sales in the sector grew by 3.5%.

Despite the heating of the market, imbalances in supply are also harmful to the sector, says the vice president of Fenauto, José Everton Fernandes.

“The imbalance is not good for those who sell, nor for those who buy. The resellers have great difficulty in replacing inventories and pay dearly for this replacement, reducing their profit margins”, he says.

The expectation of market normalization, however, should not have an effect on next year’s IPVA, warns Fernandes. This is because the tax is calculated on the average value charged by the market in the first half of the year. “There is a risk of the vehicle losing value in the second half”, he says.

Martins, from FGV, also highlights that the demand for semiconductors will continue to rise in several sectors of the economy, which are advancing in digitalization, which should continue to affect the supply of cars.

“Expansion of the productive capacity of chip and semiconductor manufacturers does not happen overnight because they demand machines produced to order. This is not on any manufacturer’s shelf”, he says. “The problems of the shortage of semiconductors should extend until the end of 2022 and also 2023”.

For civil servant Cláudio Romano, 55, who does not intend to sell his 2014 Honda Fit, the maintenance of the vehicle’s appreciation of around 30% this year means an increase in expenses that is incompatible with his domestic budget. “The sale value rose from R$ 36 thousand to almost R$ 50 thousand, the tax is R$ 2,000”, he says. “The government lacked sensitivity [do Estado de São Paulo] to make the temporary change of this index.”

When contacted, the São Paulo State Finance and Planning Department informed that the tax rates for private vehicles remain the same: 4% for passenger cars; 2% for motorcycles and similar, single-cabin pickup trucks, minibuses, buses and heavy machinery; plus 1.5% for trucks.

To mitigate the effects of the disorganization of the economy on prices, the São Paulo government informed that it has extended the IPVA payment term from three to five installments, starting in February.

Owners of used vehicles who pay the tax in advance, in a single installment, in January, will receive a 9% discount. For those who pay the tax in full in February, or prefer to pay in installments, the reduction will be 5%.

For zero-kilometer vehicle owners, the old system is valid. “The discount continues at 3% on payment until the fifth day of the issuance of the invoice, and those who prefer can also pay in five installments, without discount”, informed the secretary.