Changes to the PST contained in the Saskatchewan budget caused consumers to rethink their buying decisions when it came to new cars.
Before the tax change, the value of a used vehicle being traded in was deducted from the cost of a new one for calculating PST. The deduction was eliminated in the spring budget, a move expected to generate an additional $17 million for the government.
The change came into effect April 1, prompting some buyers to make their move in March – effectively demand was pulled forward as people tried to beat the tax.
And, as expected, April sales at motor vehicle dealerships slipped as consumers took a step back. Roughly 700 fewer units left dealer lots in April compared to March. Yet, the total was better than in the same month a year ago so the overall market appears to be growing despite the tinkering with the tax system.
The big reduction in volume came on the truck side with nearly 800 fewer units being purchased in April when compared to March. Interestingly, the number of passenger cars actually went up.