Connecticut Drivers May Face Higher Car Taxes Under New Law, 'Surprising' Many People

CONNECTICUT — Connecticut motorists could see higher car tax bills this year after a change in how vehicles are assessed for property tax.

A 2022 law, with subsequent tweaks, requires towns to use a vehicle’s original Manufacturer’s Suggested Retail Price (MSRP) and a 20-year depreciation schedule—rather than market value from sources like NADA or Kelly Blue Book.

Effective October 1, 2024, the new system values a one-year-old vehicle at 85 percent of MSRP, dropping 5 percentage points each year until reaching 20 percent, with a minimum taxable value of $500. However, in response to declines in municipal tax revenue, lawmakers passed a bill in early 2025 allowing towns to use a 90 percent starting point for one-year-old cars. Some towns, such as Trumbull and Greenwich, have adopted this to recover lost revenue and relieve pressure on local property taxes.

Towns Trying to Get Ahead of the Hike

Many Connecticut drivers—especially those in towns opting for the 90 percent starting point—might see higher bills than before. As the tax is not something on the radar of most Connecticut residents, officials in many towns have been racing to get the word out before the bills hit mailboxes.

Southington Town Manager Alex Ricciardone recently issued information in an attempt to educate taxpayers about the situation.

"This year's car tax bills are surprising many residents because some car assessments are rising, instead of falling as most expect," wrote Ricciardone to the community last week.

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Impact & Reactions

The shift to MSRP aims to bring predictability and guard against volatile market swings like those seen during the COVID supply shortages. But some towns lost billions in their vehicle grand lists and have compensated by increasing mill rates or using the 90 percent valuation option.

Lawmakers are not done dickering with the car taxes, either. A bill to phase out car property taxes by diverting pension savings into municipal reimbursements recently passed a committee—but full enactment remains uncertain.

Bottom Line for Drivers

Expect recalculated assessments that may increase your car tax bills—especially in towns using the 90 percent MSRP starting point. Some residents may pay more this year, others less; overall, the change makes assessments more uniform, but shifts tax burdens in unpredictable ways. Check your local assessor’s website to see which depreciation schedule your town has adopted—and how it may affect your next car tax bill.