4th September, 2016 ยท bulletin

Aussie car costs among the most
affordable in the world

2 minutes to read

Auto Express UK released a report on 1 September 2016 titled “Car running costs: how much does it cost to run a car around the world?” It teamed up with Car Finance247 to investigate the costs of motoring globally, and how much UK drivers pay in comparison to drivers in 11 countries – UK, Germany, Russia, US, Venezuela, Brazil, South Africa, UAE, India, Japan and Australia.

It did not come as a surprise that Australian cars are amongst the most affordable in the world.

Where possible costs were compared using the Volkswagen 1.4 as a benchmark with the exception of Japan and India where an equivalent model was used. Australia ranked 3rd behind India and just behind Russia when comparing the lowest average cost of a new car. The average cost of a new car was highest in Germany.

Insurance costs in Australia are amongst the highest in the world and ahead of the UK and US. Standard grade unleaded fuel costs in Australia (A$1.25 per litre) is comparable to South Africa and twice as high compared to the US and UAE.

The Auto Express findings are consistent with the GoAuto report of 13 May 2016 derived from the authoritative international business magazine The Economist using the Big Mac index. It found that NZ based importers’ arguments to Government and regulators that cars are cheaper in NZ than Australia are without foundation. The Big Mac index has become a global standard, the subject of academic studies and referred to in economic textbooks.

The GoAuto article titled “Parallel imports are a furphy: Australia already has the lowest RHD car prices” referred to NZ importers using the “parallel import” argument as a Trojan horse in order to gain access to the Australian market. Such rent seekers have also referred to the Australian market as “Treasure Island” with a pirate’s loot in sight without any investment in Australia in facilities, equipment, training and support for local communities particularly in regional areas.

The Federal Chamber of Automotive Industries (FCAI) commissioned IHS Automotive in 2014 to conduct an international price and specification comparison between a range of vehicles sold in right hand drive markets of Australia, Japan, the UK and New Zealand. The IHS Automotive price comparison can be accessed on the FCAI website (www.fcai.com.au). It found that when comparing like for like a vehicle sold in Australia is almost always cheaper exclusive of Australia’s absurd luxury car tax(LCT).

Click here for the Auto Express report.

Click here for the GoAuto report.


David Blackhall
Chief Executive Officer