New And Used Cars Will Get A Lot Cheaper In Australia From 2018 Thanks To Parallel Imports

A big government shake-up for local car importation laws could have massive implications for the way Aussies buy their vehicles. From 2018 onwards, you'll be able to parallel import brand new cars and avoid tariffs on imported used cars, potentially saving yourself thousands of dollars over local dealers.

Business Insider reports that changes to the Motor Vehicles Act in Australia will open up the domestic markets of dozens of countries around the world to private Australian buyers. From 2018, private buyers will be able to purchase and import cars from countries with comparable standards to Australia — the full list hasn't yet been decided, but preliminarily both Japan and the United Kingdom have been approved.

The cars must be no more than 12 months old, and must have no more than 500km on the odometer. The price difference won't be enough to justify importing cheaper cars, but just below Australia's circa-$64,000 Luxury Car Tax threshold (and beyond) there will be some bargains — with countries like the UK and Japan both selling identical cars at a significant discount to Aussie dealers. The same "Australia tax" that we're used to with technology applies even moreso with cars.

Used cars will also become far easier to import with the amendment of the Customs Tariff Act 1995, to remove a $12,000 special duty that applies to used imports. That tariff wasn't applied consistently anyway, but its abolishment is a point of comfort for wary would-be importers. Cars that are imported will have a specific plate affixed and their details added to a new register, as well as the traditional blue-slip inspection and registration process.

There are some huge advantages to import at Australia's luxury and niche car manufacturers' current pricing. A Porsche 911 Carrera S will cost you $274,000 and change to buy in Australia, while an import including freight and government fees is a full $44,000 cheaper. Some, like Tesla's Model S, have only a few thousand dollars' disparity between local and imported prices. These prices may change to make importing less attractive, or we may see more imported new and used cars on Australian roads in the near future. [Business Insider]


Comments

    "... countries like the UK and Japan both selling identical cars at a significant discount to Aussie dealers." When it comes to the UK, at least, nothing could be further from the truth. Go and price a Focus at ford.co.uk and you'll discover that a car we can buy for less than $25,000 sells for more than $35,000 in the UK. It's the same for 99% of cars currently in Australian showrooms. We have a hugely competitive market here and enjoy some of the cheapest car prices anywhere. The US is about the only market where you can buy cheaper and the new laws won't let you bring in a car from there.

    On that subject, the law will only allow you to import from RHD countries, so the assertion that you'll be bale to buy cars from dozens of countries is way off the mark. I'd suggest the UK and Japan will be the only significant places we'll be allowed to import from.

    The other important factor is that it applies only to PERSONAL importation and you will only be allowed to import one car every two years.

    Take all those factors into account and I can't see the changes having any effect on 99% of prospective car buyers. If you have a couple of hundred thou to spend, you might be able to find a better deal overseas but if just want a new mid-range SUV or hatchback, you'd end up paying a premium for a car with no warranty.

      The example that Harry over at BI uses is the Lotus Elise -- a fair whack cheaper to import from the UK, about 25% less all up.

        This example simply proves my point. Lotus probably sell around 40 or 50 cars a year now. All this means is that Lotus will leave Australia so nobody will be able to buy one with a warranty (although at least you'll still be bale to get engine parts). How is that a win for consumers?

      The price difference won’t be enough to justify importing cheaper cars, but just below Australia’s circa-$64,000 Luxury Car Tax threshold (and beyond) there will be some bargains
      The point was made in the article literally one sentence before the one you quoted.

      Comparing a Mercedes C-Class starting price on-road, UK: AU$56,755 vs AU: AU$67,503.

      The article is on point...

      I see your point on the "dozens of countries" comment, but when you look at the populations of the UK, Japan and South Africa that's a collective car supply that dwarfs Australia.

      Just for fun I went to Ford UK and priced a Focus ST (a buddy has one over here). GBP 25,620 along with a couple of extras (rear camera and optional colour) and you're dead right. The Aussie version is $43,750 drive away, compared to A$52k at current rates. Go Ford. As soon as I picked a car above the LCT threshold, it was a different story.

      A Porsche Cayman S, with optional paint and nothing else, cost GBP 49,341 inc taxes ($100,900). The same car here costs $154,747. As the article points out, the savings are huge on expensive cars.

      I can't work out how a performance Focus assembled in Germany, and shipped to Australia can work out cheaper that the UK, yet a Porsche costs another third more. That'll be local gouging.

      As one BMW dealer pointed out to the press a few years back "the local market pays the price we ask, so there's no reason to drop". There you have it. Luxury manufacturers (especially Porsche Australia) report record sales year on year for the past 5 years at least. This might be the thing to reverse their thinking.

        It's basically the Luxury Car Tax that's doing it (and a smaller competitive market over here).
        As far as the Tax is concerned, the Australian government makes more money off each Porsche sold than Porsche does.
        As for the local market, cars a priced higher simply because they can. In Europe, there's heaps more competition and they sell much higher volumes so they price accordingly.

        You will still have to pay import duty, GST and LCT on cars you bring in yourself, so to the $100,900 you'll pay for a UK Cayman, you can add another 10 or 15 grand. You'll still save money, but only until the first time you have to fix something serious or when you try and sell it. So if you save 40 grand when you buy it, you can bet you will lose 40 grand more than someone who bought it locally when you sell it, making it a zero-sum exercise.

    This is welcome news and we can expect a sizable change in pricing for many of the "luxury" models or a significant increase on online "dealerships" willing to handle the work of getting a car imported for a small fee.

    I can't see this making a difference, unless some dealer can import dozens if not hundreds of popular models at once, to sell at discounted prices versus the exact same thing up the road. Otherwise this ystem is only reserved for bespoke models we can't get here like HiPo Subarus and Nissans from Japan, and maybe some Korean and South African things.

      Korea is a LHD country, we won't be able to import from there.

    Used cars from Singapore. Owners need to scrap them at the 10 year mark. Plenty of European luxury models to choose from, and they're looked after pretty well.

      It's almost like you didn't even read the article before sharing your unrelated comment.

      > The cars must be no more than 12 months old, and must have no more than 500km on the odometer.

      Im not sure if its a requirement to scrap them at 10 years according to this article below, but most people will trade them in at the ten year mark due to inspections not making them viable to keep. Certainly an expensive country to own a car http://www.expatsingapore.com/content/view/1152

    The luxury car tax in Aus is a crock now. Designed to protect ford and holden . Aus wont have a car industry past 2017 so why the luxury car tax ?

    Last edited 11/02/16 1:54 am

      That's the thing, I haven't read anything about the LCT being canned, just that you'll now be able to import new vehicles that may not otherwise comply with Australian Design Rules. Doing your price comparisons, you still need to factor in the tariffs and taxes you pay getting it here.

      As to why we still have it...well, the government gets a lot of revenue from it. And as much as I dislike paying more tax...it doesn't seem to have deterred a huge (and ever increasing) percentage of people from going out and buying BMW, Mercedes and Audis left right and centre.

      What makes you think LCT had anything at all to do with Ford and Holden? It's not like anyone could compete with them on price before LCT and most models in HSV's range attract LCT anyway, so local manufacturers aren't immune to it.

      I think it is completely reasonable that if someone can afford to blow 65 grand on a new car, they can also afford to give the government a bit, too.

        Why? does those people money grow on trees? contrary to gangster movies and series, most people work their butts off for that money and it already double taxed before u pay the LCT. This is on top of all other sham taxes we pay. Why do u want to punish hard working people? just cause they had it made after yrs of sweat and tears it means they have to contribute more than some lazy ass so called "low income" person (and im not talking about the people toiling hard for low pay, that's unfair either).

        It amazes how many people are jealous of doctors or other professionals. These people invested time into their careers. Spent 6 yrs at uni, a few more years working 14 hr grave yard shifts to be where they are and now you and people like you who cant bother finishing highschool, play video games all day, and surf the rest of the time want to have the same life style? do you that's fair?

        Equality my butt, at least the dole bludgers get their medical for free, cheap medications, free transport, cheap rent, cheap bills, and hows paying for all their easy going lives? THE GUY/GAL WHOS PAYING THE LCT!!!

    what about the import tax? currently any imported car less than 30 years old attracts a 10% import tax (as well as a 10% GST) this was setup like the luxury car tax in order to protect local carmakers however now that we no longer have any local carmakers why do we still have the tax on imports?

    There are two linked points that the article did not cover clearly enough.

    1. This also applies to motorcycles for which there are many models overseas not available here, and
    2. You can bring in any model of car or bike, as long as it is from a country with equivalent standards. For cars this means Japan and the UK, but for bikes this is pretty much applicable to the whole developed world and so includes the USA and Europe and therefore every major brand of bike.

    I think it is with the problem of unavailable models where this law will have the most benefit.

    You need to take off 20% from UK prices (VAT) then add 33% of amount over $63,000 (LCA) then add GST. On $150,000-$175,000 cars you van end up saving around 20-25%

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