Car buyers could be getting a refund of up to $500 if they purchase a car in the City of Orange.

It comes as city voters are slated to decide on a sales tax increase this November as the city grapples with projected budget deficits. 

[Read: Is Municipal Bankruptcy on the Horizon if Orange’s Sales Tax Measure Fails?] 

In 2024, city council members considered a sales tax increase ballot measure – a proposal that failed to gain enough support.

During that same time, council members also floated the idea of a car rebate as the local auto dealerships were gearing up to oppose the sales tax measure. 

[Read: Orange Considers Car Rebate as Auto Industry Poised to Oppose Sales Tax Measure]

Now, council members are eying a car purchase rebate program aimed at five dealerships in the city.

Orange residents and businesses that buy or lease a new vehicle will get a $500 rebate, effectively discounting the sales tax at the point of purchase. Buying a used vehicle of $15,000 or more will earn buyers a $250 rebate. 

Last week, city council members voted 4-2 for the rebate program, with Councilmembers Arianna Barrios and John Gyllenhammer voting against the move because they said it should apply to all dealerships at any vehicle price range. 

Councilman Denis Bilodeau said the car purchase rebate incentivizes buying cars locally.

“It’s because of this and because I don’t like paying taxes and I don’t think many people do, I’m going to support this tonight because I think it’s an important incentive to give our Orange residents to live and shop in Orange,” Bilodeau said. 

Barrios said the money to fund the program would be better used to help out the city’s poorest, who are struggling to put food on the table as prices increase across the board. 

“The amount of people asking for food assistance in the County of Orange … has almost doubled than what it was just a year ago,” she said. 

[Read: Orange County’s Food Insecurity Continues Growing as Food Stamp Cuts Loom] 

“So the fact that we would be doing this program but my colleagues have not even entertained the idea that we would help the lowest income individuals in our community really gives me pause and makes me, honestly, very angry,” Barrios said. 

The program is set to cost the city $1,600,000 annually. $1,550,000 will be used for resident and business rebates while the remaining $50,000 will be set aside to market the program. 

Like 2024, the rebate program is contingent upon voter approval in the November elections. If the sales tax measure passes in November, the rebate program would run from April 1, 2027 and will run until April 1, 2040.

“It’s a win-win. It encourages people to buy in Orange, it’s a buy local program, it helps car dealers sell cars to residents in Orange and also to lease cars. I think it’s a great idea,” said resident Reggie Mundekis during public comment at the Aug. 11 city council meeting.

The participating Orange dealerships include Mazda, Sellman Chevrolet, Nissan, Toyota and Villa Ford.

For residents and businesses to participate in the program, they will need to show proof of residency in the city or an Orange business license at the time of sale. 

During public comment at the Aug. 11 council meeting, many people opposed the program, explaining that the program would only benefit larger car dealerships and hurt the smaller ones.

Many also said the proposed rebates won’t help to preserve city revenue as the staff report states. 

“We don’t need to subsidize car dealers. If this council proceeds to approve this VIP program, then this is how some of you VIP citizens of Orange will respond: we will urge our community to refute the sales tax measure and promote shopping locally, but not at those five dealerships,” said resident Chip O’Neal. 

Gyllenhammer, while stating the importance of protecting the presence of car dealerships in Orange, said the rebate would only benefit residents that can afford to buy cars within a certain price range.  

“It truly does create a situation where we are subsidizing and picking a specific industry that we have just created duress for because of a sales tax increase,” he said. 

“Do we want to not go to all the other Orange residents that are buying cars in any other capacity and saying ‘You will not get this rebate. You will not get it if you buy a used car, you will not get it if you buy at a used car dealership, you will not get it if you buy from a private party. We’re gonna charge you the full tax.’”

Sara Leon is a Voice of OC intern from Cal State Fullerton. You can reach her at sleon7903@gmail.com.