#cheap second hand cars
Cheaper second-hand imported cars a step closer
February 14 2014
Used luxury cars could get a lot cheaper.
Used car imports could be a step closer to reality, opening the door to cheaper luxury models from overseas.
Plans are afoot to establish an industry association and remove federal regulations which impede the practice.
Following Toyota’s announcement on Monday that it will cease its Australian manufacturing operations in 2017 – joining Ford and Holden – importers say there is no reason to continue with restrictive laws designed to protect local car makers.
However, motoring groups say the plan would be fraught with issues, suggesting stolen and unsafe cars could make their way into the country.
A panel of importers and experts from New Zealand will meet with Australian officials later this month to discuss the relaxation of laws. It’s hoped the group can pare back regulations to similar conditions found in New Zealand, where used imported vehicles comprise about 50 per cent of the overall market.
David Vinsen, the chief executive of New Zealand’s Imported Motor Vehicle Industry Association, will visit Australia to join the discussions. He says the introduction of used car imports would bring a “marked reduction” in new and used car prices in Australia.
“In New Zealand, once the used imports started coming in the price of new vehicles went down and the level of specification in cars increased considerably, injury accidents came down and the road toll was markedly reduced because the cars were safer” he said.
“It changed the way things operated in provincial towns because families could afford to operate a second car and travel.
“If and when Australian laws are changed and used imports are allowed, we think they would bring the same benefits for consumers and for the wider industry.”
However, critics of cheaper imports counter that by pointing to the reduction in the road toll in Australia over the past decade, which can be partially attributed to the introduction of newer, safer cars.
A Productivity Commission report released last month outlined how large-scale used car importation would effectively liberalise the Australian market, increasing competition and helping to lower new car prices.
“The Commission expects that, in the long term, the removal of unjustified restrictions to the large-scale importation of second-hand vehicles would benefit the community as a whole,” the report said, adding current regulations reduced competition.
Currently, about 1000 vehicles are imported into Australia each month under the restrictive Registered Automotive Workshop Scheme. Some have been built pre-1989, or are either vans or specialist and enthusiast vehicles brought in from Japan through loophole measures. There is also a get-out which applies to individual vehicles imported to Australia which have been owned by the same person abroad.
David Parfitt, a manager for Australian importer Autohub, says used imports would unequivocally benefit consumers.
“Used import laws will bring cars that are unaffordable for the general public much more affordable,” said Parfitt, whose company currently imports 350 vehicles each month.
“Cars like the 5-Series or 7-Series BMW ranges – you look at the prices of those cars compared to the prices paid in Europe and it’s chalk and cheese.
“In New Zealand, you can now get European luxury cars just as cheaply as you can get some of the Japanese cars now – I think the same thing will happen here.”
However, there is strong resistance from opponents who say the long term disadvantages of potentially lower safety and emissions standards would far outweigh any short term pricing benefits.
“We would be very cautious about going down that path,” Federal Chamber of Automotive Industries chief Tony Weber said. “You would have to look at the safety, security and environmental aspects of used imports – clearly not areas of expertise for the Productivity Commission.
“If we want to maintain high standards and protect consumers and the motoring public, we would not advocate moving to grey imports.”
The Australian Automobile Association echoed Weber’s sentiments, while another industry expert told Fairfax the move would have a disastrous effect on current used car values.
New Zealand’s average vehicle fleet age, at 14 years old, is one of the oldest in the developed world. Since peaking at almost 11 years in the late 1990s the average age of the Australian vehicle fleet dropped to 10 years in 2013, according to the Australian Bureau of Statistics. In some European countries the average vehicle age is less than eight years.
The industry source said if Australia was to proceed with the import laws, the government would need to consider a cut-off date of at least seven years (the same set by New Zealand in recent years), as well as minimum NCAP ratings or emission levels.
Vehicle odometer readings and histories (including whether the car was involved in a crash or has been stolen and rebirthed) are also understood to be recurring issues in New Zealand.
Vinsen argued New Zealand enforced stringent laws to prevent stolen, written-off or damaged cars entering its market. He said a separate industry around spare parts and other supply chains had sprung up since imports took effect more than two decades ago, negating concerns about availability of spare parts.
“There’s a whole section of a government department in New Zealand now that is devoted to making sure that vehicles that come into the country meet our standards and specifications,” he said.
“Arguably, we have probably the most stringent set of tests and examinations in the world. The procedures that we have in place, which are government-controlled and are run by government-appointed agencies, are more about the documentation and pedigree rather than the vehicle.”
Calls to relax import laws come as motoring groups urge the federal government to scrap a 5 per cent tariff which exists on new vehicles, as well as the controversial luxury car tax which applies to vehicles over $60,316.