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Shakey Bones

Why Do We Pay More For Cars?

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Very interesting article, so I guess it isn't all the governments fault it is equally price gouging from manufacturers and our own stupidity for paying so much for news cars. - Supply and Demand I guess.

 

http://www.carsguide.com.au/news-and-reviews/car-news/why_do_we_pay_more_for_cars?from=ms

 

Australian buyers pay more for cars than those in the US.

New-car prices are at record lows and driving a sales boom, but a survey by News Limited has found Australians still pay more than buyers in the USA. In some cases the prices are more than double.

 

The Nissan Pulsar and Toyota Corolla have both limboed to $19,990 locally in the past six months -- the same price they were 10 years ago. But the same models in North America start at between $16,140 and $17,850 respectively. The Australian dollar has had parity with the US dollar for two years.

 

Australia’s top-selling car, the Mazda3, has a recommended retail price of $20,330 locally (before on-road costs are added) but the same car starts at $18,370 in North America.

 

The gap widens as prices rise. A Toyota Camry starts from $30,490 locally but the same model is $24,460 in the USA.

 

Mazda’s mid-size sedan, the Mazda6, has an even greater price disparity -- more than $10,000. It’s cheaper than the Camry in the US but dearer than it in Australia ($33,460 versus $22,968).

 

Mazda Australia spokesman Steve Maciver said standard equipment varies from country to country: "We look at how we compare to our rivals and we are happy with our prices. We believe we offer good value for money."

 

More glaring examples begin in the $50,000 price bracket. A BMW 320i sedan in Australia costs $58,600 (just below the Luxury Car Tax threshold) but in the USA can be had for the same money as a Holden Commodore: $35,805. The Mercedes-Benz C-Class sedan has a greater disparity: $67,900 here versus $35,350 there.

 

The car industry argues new-car prices are higher in Australia because it costs more to recoup the development costs of right-hand-drive cars given that the markets are smaller.

 

“Volume is king and more cars are sold in left-hand-drive countries than in right-hand-drive countries, so the customer has to pay,” said Mercedes-Benz Australia spokesman David McCarthy. “We have worked hard to make our cars as affordable as possible, and put more equipment in them, and still make a profit.”

 

McCarthy said shipping costs are also higher because the distance is greater and the car carriers mostly leave Australia empty: “it’s a one-way trip”. The cost of financing vehicle orders also ties up more money because of the longer delivery time from Europe. “We as a wholesaler pay for each car as it leaves the factory gate, then it’s in transit for up to three months before the customer pays for it.”

 

German sportscar maker Porsche last week slashed prices across its range – by as much as $36,000 in some cases. But Australians still pay more than double than those in the USA for one of its speed machines.

 

A Porsche Carrera 911 was $229,400 in Australia before the price cut, but will drop to $206,500 from June 1. That might be cause for celebration for some, but the champagne loses its fizz when you discover the same car starts at $92,730 in the USA.

 

Australia’s Luxury Car Tax accounts for an extra 33 per cent of the Porsche’s price above $59,133 (the threshold set by the Federal Government). But that still doesn’t explain why the Australian price is more than double what it is in North America.

 

When asked why there was still such a large price anomaly, Porsche Australia spokesman Paul Ellis said: “You don’t price your car against what it costs in other countries, you price it against its local competitors. It’s market positioning.”

 

Prestige brands have strongly opposed Luxury car Tax since its inception in 2000, even though Toyota now pays more LCT than any other brand due to the large number of SUVs it sells over the threshold.

 

Porsche says the LCT is a “discriminatory tax”. “There isn’t a tax on other luxury goods. Cars are seen as a soft target,” said Ellis.

 

 

Car / Australia / USA

Nissan Pulsar $19,990 / $16,100

Toyota Corolla $19,990 / $17,850

Mazda3 $20,330 / $18,370

Toyota Camry $30,490 / $24,460

Mazda 6 $33,460 / $22,968

Mazda CX5 $27,880 / $23,315

Mazda MX-5 $47,280 / $26,092

Toyota Prius $33,990 / $26,620

Mercedes C250 $67,900 / $35,350

BMW 320i $58,600 / $35,805

BMW 335i convertible $112,900 / $59,180

Range Rover HSE S/C $224,400 / $91,900

Porsche Carrera 911 $206,500 / $92,730

 

Source: Car manufacturer websites. All prices are in Australian dollars and do not include special offers or on-road costs. A 10 per cent sales tax has been added to all US prices (to match Australia’s GST, which is included in RRPs) even though the US national sales tax average is 7.5 per cent (from 3 per cent in Montana to 11.725 per cent in Arizona).

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America is a bad comparison, since our average wage is much higher. Their minimum wage is a joke, and you see average family's on $30k/year over there..

 

Luxury car tax is rape, though.

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When asked why there was still such a large price anomaly, Porsche Australia spokesman Paul Ellis said: “You don’t price your car against what it costs in other countries, you price it against its local competitors. It’s market positioning.”

 

What local competitors have a $200K sports car?

 

Australia has it all arse-about. f**k off locally manufactured, Australian only models like the commo & falcon. From there, loosen the stranglehold on the car market, drop all the bullshit taxes, open up the import regulations and then Australia has decent cars that we pay less for.

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Australia has it all arse-about. f**k off locally manufactured, Australian only models like the commo & falcon. From there, loosen the stranglehold on the car market, drop all the bullshit taxes, open up the import regulations and then Australia has decent cars that we pay less for.

 

a lot of execs would lose some fat cash along with some cash under the table deals that probably go on. This'll never happen. Just like the car that runs on water.

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Hahahahahaha.

 

BMW M3 convertible, 6 speed manual in South Africa: $114,151.24 AUD (http://www.bmw.co.za/products/automobiles/m/m3coupe/m3coupe_overview.asp)

BMW M3 convertible, 6 speed manual in Australia: $147,069 AUD BEFORE lct, BEFORE dealer delivery, BEFORE registration and BEFORE stamp duty. This is to my postcode in SA. (http://bmw.com.au/faces/jModelComparison.jsp?first=92&tab=Pricing) Add another $3.5k for delivery, then another $35,314.80 for stamp duty, LCT and registration in SA, making it $185,883.80 total.

 

f**k, why not buy 3?

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It's the same for everything, I remember seeing a report only a couple months ago about Australians paying twice as much for software.

 

http://mobile.news.com.au/money/cost-of-living/the-price-you-pay-for-being-an-aussie/story-fnagkbpv-1226576495570

 

We've bent over for years to the rest of the world in absolutely everything, from being a mining and food/resources bitch and sending anything worth something over for f**k all.

Aswell as paying top dollar for anything worth f**k all in hindsight because its just consumables/luxuries.

 

Our lifestyles better but f**k do we pay through the nose for it.

Edited by brent47

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is it true you can buy the equivalent of our ss commodore in america cheaper than buying one here, even though it's made here?

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is it true you can buy the equivalent of our ss commodore in america cheaper than buying one here, even though it's made here?

Tha Australian tax payer makes up that difference !

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Pretty sure i read a thread on here saying that its cheaper to buy a return plane ticket to America and then buy a certain piece of Adobe software over there then it is to just buy the software here.

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lets not forget usa is a much larger market so prices will always be cheaper its the same with everything.

for example an australian made product like a haltech ecu can be bought cheaper retail in usa than it can be bought with a dealer price list in australia (i know because i have one) My suppliers and wholesalers in america would buy a container load of haltechs from australia so they get a mammoth price break, as aposed to a dealer in aus who will buy 1 or 2 units a week max.

Manufactures want to move quantity and they will offer larger margins for those who can move the quantity for them, a mazda what ever model may cost an australian dealer 18k to buy and 22k to sell, but in america they might be getting them for about 14k so they can afford to sell for 18k, and not just that they have more people to sell to so even dealers can lower margin to move more product and keep up numbers with volume instead of margins.

 

Aus get shafted like that a lot but look at our population compared to others its pretty dismal really

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^^ agreed people always love to rant about Australia being expensive, it just comes down to 2 criteria imo.

 

- We get payed stupidly high amounts.

- We have a very small population for item turnover.

 

Its like when people go to Thailand/Vietnam/Bali on holidays and rant about how cheap it is, the average yearly wage of somebody from them country's is how much you would spend on your holiday alone.

 

We have it really good in aus, no idea why people complain.

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^^ agreed people always love to rant about Australia being expensive, it just comes down to 2 criteria imo.

 

- We get payed stupidly high amounts.

- We have a very small population for item turnover.

 

Its like when people go to Thailand/Vietnam/Bali on holidays and rant about how cheap it is, the average yearly wage of somebody from them country's is how much you would spend on your holiday alone.

 

We have it really good in aus, no idea why people complain.

agreed and plus we also get medicare which is paid by the government in America they have to pay for medical , so much benefits in Australia compared to America

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france has all of their medical benefits funded by the government. i somehow doubt that they pay as much for a porsche as we do, even taking shipping into account.

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Our houses are significantly more expensive than the US with regard to average prices. Also, for European or Japanese models of cars, claiming an additional cost to develop RHD is a joke, since the RHD market is of a similar size to LHD when you consider all European nations that use RHD cars.

 

Personally, I don't think the simple economics of buy/sell/margin/quantity is key to the US market's car prices being so cheap; my view is it's the massive abundance of second-hand cars, as the US have been making cars for a really, really long time. When you can buy a 2005 Pontiac in great condition for $3000, a new car would have to be super-cheap for anyone to bother, and a very large number of Americans either have that mindset or simply don't have the finances for a new car anyway.

 

For evidence of this you have to look no further than their credit scheme for cars and government incentives to get people to buying new cars. At one point following the GFC, one or more states had a scheme to give cash for old cars irrespective of condition, if people were to buy a new car. People were down on money, and there was simply no incentive to buy new with all the good used cars available.

 

The other point is their financing scheme, and anyone who has watched local TV in the US can attest to this fact. In Australia, cars are always advertised with their full drive-away price. In the US, they are only ever advertised with their weekly financing payment amount. There is NO expectation that you rock up with a bank loan and pay for the full price of a car as it is here, but rather that you rock up and sign a credit card payment contract.

 

The US economy is driven by credit, whereas Australia is not. You can even get insurance over there to protect your credit card rating, as too low a rating and you can't buy certain things.

Edited by pmod

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Our houses are significantly more expensive than the US with regard to average prices. Also, for European or Japanese models of cars, claiming an additional cost to develop RHD is a joke, since the RHD market is of a similar size to LHD when you consider all European nations that use RHD cars.

 

Personally, I don't think the simple economics of buy/sell/margin/quantity is key to the US market's car prices being so cheap; my view is it's the massive abundance of second-hand cars, as the US have been making cars for a really, really long time. When you can buy a 2005 Pontiac in great condition for $3000, a new car would have to be super-cheap for anyone to bother, and a very large number of Americans either have that mindset or simply don't have the finances for a new car anyway.

 

For evidence of this you have to look no further than their credit scheme for cars and government incentives to get people to buying new cars. At one point following the GFC, one or more states had a scheme to give cash for old cars irrespective of condition, if people were to buy a new car. People were down on money, and there was simply no incentive to buy new with all the good used cars available.

 

The other point is their financing scheme, and anyone who has watched local TV in the US can attest to this fact. In Australia, cars are always advertised with their full drive-away price. In the US, they are only ever advertised with their weekly financing payment amount. There is NO expectation that you rock up with a bank loan and pay for the full price of a car as it is here, but rather that you rock up and sign a credit card payment contract.

 

The US economy is driven by credit, whereas Australia is not. You can even get insurance over there to protect your credit card rating, as too low a rating and you can't buy certain things.

 

How did you figure? : since the RHD market is of a similar size to LHD when you consider all European nations that use RHD cars

 

correct me if I'm wrong but the only RHD market in all of Europe is the UK - the rest is LHD

Edited by Joshua182

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How did you figure? : since the RHD market is of a similar size to LHD when you consider all European nations that use RHD cars

correct me if I'm wrong but the only RHD market in all of Europe is the UK - the rest is LHD

 

Correct, however a lot of the nations allow RHD cars to coexist, and a lot don't care what you're driving, unlike Australia and the US in which it's possible to have an opposite-side car, but not very easy to do so.

 

I'll concede that "similar" was a poor choice of wording on my part though, as the US and China currently dominate new car sales, however long that will last given their economic problems.

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At this stage in my life I like older modified jap sports cars and so I buy ones that are already here. However when it comes time to buy something newer and stock standard I will be thinking very carefully about whether I buy locally or buy from somewhere like the UK and just drive unregistered. I am just not willing to pay the price premium over what other countries can get the same thing for. I think if the government were to get rid off all import restrictions on cars and we could ship over whatever cars we wanted from places like the UK, then there would be an absolute nose dive in the prices of locally delivered cars in Australia because no one would buy them otherwise. I do not think this is viable though.

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At this stage in my life I like older modified jap sports cars and so I buy ones that are already here. However when it comes time to buy something newer and stock standard I will be thinking very carefully about whether I buy locally or buy from somewhere like the UK and just drive unregistered. I am just not willing to pay the price premium over what other countries can get the same thing for. I think if the government were to get rid off all import restrictions on cars and we could ship over whatever cars we wanted from places like the UK, then there would be an absolute nose dive in the prices of locally delivered cars in Australia because no one would buy them otherwise. I do not think this is viable though.

 

LOL it wont get into the country....

customs will seize it at the wharfs and tell you too send it back or destroy it

 

and anyone that thinks the govt will give up a tax if the falcon and commodore disappear are kidding themselves. luxury car tax will be here to stay for a very long time!

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This was posted in teh Youtube thread. It makes me think it aint so bad for us. f**k living in Singapore. $136 000 USD for a Subaru BRZ.

 

http://youtu.be/lf7A5j2QO5E

Edited by Shakey Bones

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At this stage in my life I like older modified jap sports cars and so I buy ones that are already here. However when it comes time to buy something newer and stock standard I will be thinking very carefully about whether I buy locally or buy from somewhere like the UK and just drive unregistered. I am just not willing to pay the price premium over what other countries can get the same thing for. I think if the government were to get rid off all import restrictions on cars and we could ship over whatever cars we wanted from places like the UK, then there would be an absolute nose dive in the prices of locally delivered cars in Australia because no one would buy them otherwise. I do not think this is viable though.

 

LOL it wont get into the country....

customs will seize it at the wharfs and tell you too send it back or destroy it

 

and anyone that thinks the govt will give up a tax if the falcon and commodore disappear are kidding themselves. luxury car tax will be here to stay for a very long time!

 

you seem to think that LCT is the only tax on cars?

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GST 10%

LCT 33%

Duty 10%

 

thats what i know of the top of my head for an import of 60k.

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I often think about importing a car into the country as track only to save on the taxes then get the shell of the same model and colour from the wreckers for cheap then register the shell and put the plates on the import.

 

For 90% of situations nobody would notice.

Edited by Chappy

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I often think about importing a car into the country as track only to save on the taxes then get the shell of the same model and colour from the wreckers for cheap then register the shell and put the plates on the import.

 

For 90% of situations nobody would notice.

that is an awesome idea just change the engine numbers at Rego office and your good to go

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that's rebirthing, which is illegal

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

but i'm guessing you already knew that lol

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Atleast not in a cut and shut stolen sense, but it's the other 10% part.

 

You might be able to keep it pristine, but it's the other road users that would cause something to occur on the roads.

That thenn brings attention to what was probably a beautifully maintained safe car that saw 40k of autobahn etc after being made to a level of quality.

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that's rebirthing, which is illegal

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

but i'm guessing you already knew that lol

 

Rebirthing is different because you are switching the vin numbers.

In this case it would be like stealing the number plates from a car of the same model and colour. Difference being you own that car too, so the plates are never reported stolen.

 

If a cop calls in your plates they would be registered as a red skyline and the officer would see a red skyline and think nothing of it.

 

The only time you would be screwed is if somebody has to check the vin number.

Also if you write your car off they would find out and there goes your insurance.

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mate imported a race only e46 m3 and we have joked about that.

 

saved a heap of $$ compared to local stock ones

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Not talking about switching plates

Talking about buying a shell that is clean and registerable and then importing the same car and fitting all the parts it won't be hard to change engine numbers since itd be the same engine the car came with so it wouldn't be hard too keep it legal and report the different engine serial not speaking from experience but I cant see anything illigal or different from doing an engine swap

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If your going to go to all that effort changing the vin number isn't that hard either.

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