If you’re one of the lucky Aussies with thousands of dollars to invest in a luxury vehicle, be careful when attempting to buy one in Australia.
Australia is noted around the world as one of the most expensive places in the world to buy luxury vehicles, writes the Sydney Morning Herald. The great daily notes the same model car can cost twice or even three times as much here as it might in Great Britain, America and other countries.
Cars Guide Australia even chimed in with questions of its own in a 2011 article on why even basic cars cost more on the homeland. Representatives from several auto manufacturers pointed to inefficiencies in Australia’s car market related to volume, shipping, product costs, income disparity and more. The significant volume level difference between the US car market (13 million cars sold annually) and the Australian market (1 million sold) accounts for much of the higher costs.
It seems that Australians are being penalized rather than rewarded for their participation in a good economy. Some argue that the sky-high price is justified as a result of the still-strong Australian economy, and it’s a basic fact of economics. Others claim that without such financial barriers, the economy would be even doing better.
Here are a few key reasons why Australia isn’t a favorable country to buy a luxury car:
Strength of AUS dollar
One of the key reasons why the cost is higher is because of the relative strength of the Australian dollar compared to the meager US dollar and the Euro. With its strength comes an opportunity to drop prices on the homeland, but some companies don’t do that. A spokesman for auto company BMW in Australia noted in the article that the firm tries to hedge its prices against currency fluctuations, neither raising prices when the dollar is weak or lowering prices when the dollar is strong.
Luxury Car Tax
Another reason for the high prices for luxury cars in Australia stems from the government’s luxury car tax. The luxury car tax was introduced by the Howard government in 2000, and has since been bumped up several times, once to 25 percent tax on vehicles over aus$55,000 and again in 2008 to 33 percent tax on high price vehicles.
Insurance for Luxury Vehicles
Another reason for high prices of luxury cars includes the cost of insuring these vehicles. Too often, cars can be expensive to insure on Australian roads. There are discounts available for car insurance if you shop around. For a competitive car insurance comparison in Australia, consult an insurance discounter such as Budget Direct or a similar firm to help in this area.
Parallel Import laws
The Australian government still has parallel import restrictions on cars, which means that it has restrictions on similar products coming from other countries. Some view this as trade obstructionism, but in recent years the new auto industry has lobbied successfully to ban parallel imports in Australia. Some believe that this is the number one reason for high prices.
Choosing to buy a luxury car is entirely up to the determination and bank account of the individual, but some Australians feel that it may serve the buyer better to figure out ways to bring an imported car into the homeland.