The Orange City Council last week approved a car purchase rebate program by a 4-2 vote, with Councilmembers Arianna Barrios and John Gyllenhammer opposing the measure. The program's implementation is directly tied to the outcome of a sales tax increase measure set before city voters this November.
Under the newly approved program, Orange residents and businesses purchasing or leasing a new vehicle from participating dealerships could receive a $500 rebate. Buyers of used vehicles priced at $15,000 or more would be eligible for a $250 rebate. The rebates are intended to discount the sales tax at the point of purchase. Five specific dealerships are set to participate: Mazda, Sellman Chevrolet, Nissan, Toyota, and Villa Ford.
The initiative comes as the City of Orange grapples with projected budget deficits and follows a failed attempt to pass a sales tax increase ballot measure in 2024. During that earlier period, the council had also considered a car rebate concept as local auto dealerships expressed opposition to the proposed sales tax.
The program is projected to cost the city $1,600,000 annually, with $1,550,000 allocated for resident and business rebates and the remaining $50,000 for marketing efforts. If the November sales tax measure passes, the rebate program is slated to run from April 1, 2027, until April 1, 2040.
Councilman Denis Bilodeau supported the program, stating it incentivizes local car purchases and helps Orange residents to "live and shop in Orange." Resident Reggie Mundekis, during public comment at the Aug. 11 city council meeting, described the proposal as a "win-win."
However, the program faced opposition. Councilmember Barrios argued that the funds would be better utilized to assist low-income residents, citing a significant increase in demand for food assistance in Orange County. Councilmember Gyllenhammer expressed concern that the rebate would primarily benefit residents able to afford vehicles within a certain price range, effectively subsidizing a specific industry while potentially creating duress due to a sales tax increase.
During the Aug. 11 council meeting, public comments also raised concerns that the program would disproportionately benefit larger dealerships and not help preserve city revenue as claimed in the staff report. Resident Chip O’Neal voiced opposition, stating, "We don’t need to subsidize car dealers" and suggesting that approval could lead the community to oppose the sales tax measure and avoid the five participating dealerships. The program's future now rests on the November elections, where voters will decide on the sales tax measure.
