In 2018 we’re expecting used cars to get a lot cheaper. Government laws are changing so that after 2018, you’ll be able to avoid tariffs on imported used cars, and save thousands of dollars on the current purchase prices.
Changes to the Customs Tariff Act 1995 remove the $12,000 special duty that applies to used imports. While it won’t be applied consistently to all imported used cars, it’s going to have a dramatic impact on the selling prices of used imports, introducing competition to the luxury used car market in particular.
Individuals will be able to import cars from Japan and the UK, with a full list of countries yet to be determined.
Other changes to the Motor Vehicle Standards Act include the need for an identification plate to be fixed to an imported car. This information will now be stored on the Register of Approved Vehicles, a change that will save bulk importers and manufacturers around $18 million each year.
These laws were initially put in place in to protect the local car industry, but have proven to be a costly administrative burden that fails to achieve this goal as manufacturing plants in Australia close down.
Mitsubishi, Ford, Holden and Toyota have all now largely left Australia to take their manufacturing overseas where the costs of production are significantly lower.
While you may be able to source a cheaper second hand luxury car from overseas, you’ll be without the benefit of a local warranty if there’s faulty parts.
Brands that will be most affected by this change include Porsche, Lotus and BMW. According to Business Insider, luxury car prices will drop by anything from $10, 000 to $42, 000.
This is great news for sports car fans, with ‘sports cars over $200, 000’ forming the fastest growing segment in the Australian vehicle market in 2015, a 30% increase on the previous year.
New luxury model cars purchased in 2015 will become available for purchase second hand this year, allowing you to benefit from ownership of a near-new car without taking the massive depreciation hit of the first 2 years.
When you’re buying a luxury used car, it pays to check where you can source the parts you’ll need down the track. Finally owning the vehicle that you’ve always aspired to could turn out to be stressful if you don’t know in advance how you’ll maintain it, and what costs to expect.
Luxury cars cheaper to buy than you think - but beware the cost of special parts and tech. It pays to make sure that you can source spare parts in your city without difficulty, or that you know in advance that you’ll need to order parts in specially.
There’s some clear advantages to owning a used luxury car rather than a new, cheap car for the same cost. Manufacturers of luxury cars have a different attitude to car design, and they emphasis comfort over cost cutting.
This means that in a 15 year-old Mercedes you’ll find features like double-paned glass for sound insulation, with a layer of air between the panels that prevents the windows from fogging up. Other small features include rear vanity mirrors, air vents for the back seats, and an audio system that detects noise inside the cabin and adjusts the volume accordingly.
Buying a second hand luxury car makes a lot of sense if you appreciate the finer things in life, but you don’t want to make the financial outlay to buy a new luxury car.
The first obvious advantage of choosing a used car is that you’ll be able to afford a much nicer car without breaking the bank. Comfortable seats, thoughtful design, a more powerful engine all create a better driver experience.
It’s not something many people consider when buying a car, but luxury models often come with more advanced safety equipment than their cheaper counterparts - just another perk of the attention to detail and design that you’ll really appreciate if you’re ever in a bingle.
Another key advantage is that you’ll get less depreciation. Cars depreciate up to 20% in the first 2 years, after this period, depreciation slows. This means buying a used luxury car, you’ll be able to sell the car for much closer to the amount that you paid for it than if you buy a cheap new car. Buy the right car and keep it for long enough, and you’ll see it’s value increase over time.
With a second hand luxury car, you’re making a serious style statement and confidently aligning yourself with those who appreciate great design and value quality vehicles.
Buying a used car that ticks all of your boxes is an ethical choice too. Rather than throwing away hundreds of kilograms of plastic and chemicals to buy a brand new car that has required even more materials and energy to manufacture, you can extend the life of an existing car, reducing the impact of car manufacturing on the environment. If you’re all about the bigger picture, buying a second hand car makes a ton of sense, both from a price point of view, but also from a conservation point of view.
Luxury cars that are resold by an authorised dealer often come with a warranty of their own when you purchase a certified pre-owned model. You can also look into the option of a third party extended warranty, but make sure that you understand exactly what the cover you’re purchasing includes.
Getting a pre-purchase inspection by an independent mechanic can also help you to have the peace of mind that everything foreseeable is in ship shape.
It also pays to know a bit about the manufacturer behind your new luxury car. Sometimes you’ll be able to use replacement parts from the cheaper sister model, which can save you a lot of money over time in car maintenance.
Right now, when you want a specific car that’s an overseas model, these cars can only be imported for you by a handful of ‘Registered Automotive Workshops” (RAWs). If the exact car that you want isn’t already on the list of approved imports, you’re looking at at extensive process to first apply to have the vehicle added to this list.
Once the vehicle arrives, the RAW has to make modifications and do a maintenance check so the car meets Australian safety and environmental standards, as well as having a VIN added. You’ll have to pay the cost of these modifications.
There’s a few costs and a bit of red tape to get through before you’ll get the car. You’ll need a vehicle import approval for any car that’s going to be used on public roads - and even if it’s for a specialised purpose, the approval will mean the vehicle will be released by Customs much faster, and you’ll avoid potential storage fees.
If you’re in a hurry to get your next car, you’re better off buying from a local used car dealer, where you’ll have peace of mind that the car is ready and safe to drive away immediately.