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The Big Price Rip Off Revealed

The Big Price Rip Off Revealed

The Aussie car buyer is being subjected to the biggest rip off in memory at car dealers’ showrooms if the following pricing chart reflects the truth!

It’s impossible to reach any other conclusion based on the figures we’ve gleaned from manufacturers’ web sites around the world.
Our survey of retail prices in Australia against cars of similar specification in the US and the UK show that, on average, we are paying at least 20 per cent too much for our new cars, and you can’t just blame the government’s high tax rates!

Whilst it is only a sample survey of selected makes and countries our price analysis depicts a very clear and compelling message to the Aussie motorist.

On the basis of the current value of the Australian dollar, most retail car prices could be drastically reduced and the manufacturer would still be making the same profits that he makes elsewhere in the world!

Why Do We Say This?

It’s pretty obvious if you study the chart below. We have selected a sample section of cars right across the price range and compared the selling price in Australia, the USA and the UK.

We have endeavoured to choose cars with similar specifications, but, of course, there will still be some differences so you should take the pricing as a guide only. Variations will occur depending on a number of factors including local taxes and delivery costs, but we don’t think that will make more than 5% difference on the prices quoted in most cases.

So let’s take a closer look at some of the statistics that we have gleaned from the chart.  For the source of all these data, click here

• Adding all the prices together there is a 71% premium that the local buyer pays over his English counterpart. That premium leaps to 121% when compared to the USA.

• Even if we take out the expensive cars (which suffer a very high tax premium in Australia) we still see us suffering to the tune of 20% against the UK and 83% against the US.

• Economy cars have a closer price link, particularly those made in Asia. In some cases there is almost price parity, so good on you Toyota, Nissan and Mazda!

• More expensive cars get much more expensive! This is particularly true of Mercedes and BMW who seem able to charge so much more than their overseas colleagues, and, of course, you can see even clearer evidence of this with the exotic makes like Ferrari and Lamborghini.

Some Glaring Examples

We’ve applauded Toyota, Nissan and Mazda for close price alignment with their small cars, and we were impressed with Subaru’s pricing of their Forester and Outback models.

But now look at their sporty WRX STI. Here we see the poor Aussie car buyer is paying a 31% premium over the UK price and a massive 107% more than if he bought the same car on the USA. Why? Well, we asked Subaru Australia, and even they couldn’t give us an answer.

Now turn the spotlight on to Mercedes and its four wheel drive ML300. We pay a huge 47 per cent more than in the UK! You may think that it’s because the car is made in Europe- but it isn’t. It’s made in the USA, both versions are right hand drive with very similar specifications. OK, then, maybe it’s due the luxury car tax of 33%? Wrong again!

The luxury car tax for this car doesn’t cut in until the retail price (inc. GST) reaches $73, 375.00 and contributes only (?) $7341.69 towards the final RRP. Deduct this from our calculations and we still see a punishing premium of 35% against the UK and 97% against the USA recommended retail price.

So why is this so??

We asked a number of local players to offer reasons why there is such a disparity, and they all quoted pretty much the same answers:-

• “It’s the government’s fault with the taxes they impose”

Our Comment:-

Yes, but that is only partly true. There is a 10 percent import duty and 10% GST in Australia, but the GST in the UK (VAT) is 20% which is virtually the same.

• “The State governments get taxes too”

Our Comment:-

Again that is partly true as there is stamp duty on the purchase of a new car, but there are similar taxes (though not always as much) elsewhere.

• ‘Australian prices include third party insurance’

Yes, we agree. In the UK third party insurance is extra, which for basic cover could add $500 to the prices quoted in our comparison chart. The same applies for US vehicles. But if you add $500 to each price you still see a massive premium for Australian buyers.

• “The figures are exaggerated by the luxury tax component”

Our Comment:-

Yes that’s also true, but if you take the luxury tax off the figures for luxury cars there’s still a premium of 35% over the UK (and the Ferrari is still at least 45% more!)

• “Economies of scale work against us”

Our Comment:-

Now there we agree completely! A car dealer in the US deals with many more customers than here. That saves him money. The importer or manufacturer enjoys economies of scale too, but not to the degree reflected in the pricing, otherwise you would not see parity on any of the cars in the table.

• ‘Transport costs are higher’

Our Comment;-

Again there is some truth in this, but it only makes a difference of less than one percent in the final price – hardly a worthwhile justification. In some instances it also works against the Australian price premium as it costs more to send cars from Asia to Europe.

• “Australian Design Rules cost a lot to comply”

Our Comment:-

Many imports require little effort to comply, and therefore impose little extra costs. Some do require a lot and are therefore not usually imported.

• “It’s a short term aberration due to the strength of the Australian dollar”.

Our Comment:-

Yes, there’s some truth in this, too. We need stable prices, and do not want them to fluctuate daily with the currency market, and, indeed, when the dollar sank in the late nineties importers tried hard, and to their credit, to delay price increases. But the dollar has risen above these low rates and has been sustained as a strong currency for a long time now, so we are well overdue for some benefits from it.

None of these reasons amount to much in our view, certainly not enough to justify anything like a 71% premium.

Having heard all the excuses our take on the price differential is:-

1. Manufacturers and importers will charge the highest price they can expect to get.

2. They have not, in the main, reacted quickly enough to the strong Australian dollar.

3. ‘Perceived luxury’ means bigger margins.

4. The Australian car buyer seems happy to wear it.

So what can we do about it?

The internet is already doing favours to the Australian consumer. We are seeing more and more parity pricing, and the willingness of consumers to purchase from overseas. Whilst that is more difficult, if not impossible, to do with new vehicle purchases, it certainly helps in making people aware, and that increases pressure on manufacturers and importers to be more in line with overseas markets. Nobody likes the tag of ‘profiteering’.

We think this is a true rip off of the Australian motorist, so we want to make waves!  We’ve created a Facebook Group, we are contacting the media and we’re enlisting your support. So let’s hear from you below, and join us on Facebook and help us bring the car makers into line!

Remember the more ‘digital signatures’ we can gather below and on our Facebook page, the greater difference we can make!


  1. Steven Arends says:

    The data does not lie…. we are being over charged for new cars in oz.

    July 1st, 2011 at 12:16 pm

  2. Aseet says:

    As always, it is only market power that will make any lasting impact. Particularly with the strength of the A$ likley to be high over the forseeable future you would think that there would be a market for third party companies to import vehicles from overseas, pay the necessary taxes, make the modifications for Australian compliance and still make a nice profit while getting genuine material savings for the end customer. This may only be a short-term opportunity before manufactureres start bringing their pricing in line with world markets….but surely someone can seize the opportunity.

    July 1st, 2011 at 12:20 pm

  3. ozboy says:

    I think that while Ozzie’s are buying more and more cars the industry will not change, why would they if we can afford the price asked for then why would anyone (gov, importer, wholesaler, retailer), however I think that this sort of situation would be great for your business…don’t kill the goose laying the golden eggs!

    July 1st, 2011 at 12:21 pm

  4. Greg Ford says:

    I just took delivery [in March acually] of a brand new, top spec E class Benz at my holiday home in England. It cost just under AUS$76K. When I ask Grand Motors on the Gold Coast what it would cost here, they quoted me AUS$157K.
    No wonder we have such a dated & lower quality national car fleet!
    Greg Ford.
    Gold Coast

    July 1st, 2011 at 12:24 pm

  5. Peter Watson says:

    Unfortunately the government has a vested interest in high prices due to revenues. Having been to england and seen a mate purchase a 2005 BMW x5 diesel with 58,000 miles for 12,000.00 pounds in the last 12 months its certainly makes you wonder. Trouble is the Pollies are out of control so everyone thinks why not gouge the public some more like them. You just have to look at petrol pricing to see the injustice. More people need to speak up and complain. Great article, keep up the good work

    July 1st, 2011 at 12:25 pm

  6. Trevor says:

    And this explains why we are buying more and more parts overseas.

    My wife’s Merc AMG supercharger bearings wore out and she was told that it was a non-seviceable part and would cost $8,000 to replace (+ Labour). It’s Japanese supercharger and cost $800 to fix (incl. Labour).

    July 1st, 2011 at 12:25 pm

  7. trentyn says:

    This deffinately needs broader visibility. However as the sayin g goes, something is as valuable as what someone is prepared to pay for it.
    the likelihood of reducing the number of people that buy cars is slim and none and so the cost of cars will continue to stay high.

    July 1st, 2011 at 12:31 pm

  8. Geoff Hodsdon says:

    Having lived in the USA for 30 years (1968-1997) I was very aware of the price difference. Nice to know you are trying to do something about it. For interest sake Tennis Balls are the same. US price for the past 40 years $3.00 per can of three and here $12.00. Please explain……!

    July 1st, 2011 at 12:33 pm

  9. Geoff Smith says:

    It’s about time someone exposed this outrageous rip-off and put pressure on the car manufacturers, importers and dealers. I hope you send this to the motoring magazines and TV programs such as ACA and Today Tonight who love a good rip-off story.
    I’m sure the everage punter is not fully aware of the grossly inflated prices they’re forced to pay for a new car compared to overseas. It’s a disgrace.
    Well done and good luck with this.

    July 1st, 2011 at 12:34 pm

  10. Brian Chapman says:

    Go Private Fleet – Australian Importers have been ripping us off for decades. Lexus prices in the US are in some cases for identical spec cars 55-60% of the Aussie price. That’s on road prices including taxes for both. This is price gouging because they can. Oh if we could only buy cars on line from US dealers, then we’d see prices plummet.

    July 1st, 2011 at 12:34 pm

  11. ken crouch says:

    Is there any point in waiting before I buy my new car?

    July 1st, 2011 at 12:35 pm

  12. Don Craggs says:

    I have been verbal for a long, long time now, about the ‘Great Aussie Rip Off’.
    I have spent the last 4 years window shopping for a UK manufactured, well known 4X4.
    I bought it a month ago, not because it was good value, but because of my age, if I didn’t get it now, I would never be able to enjoy it.
    The ACCC is a ‘Toothless Tiger’, and as the average Aussie buyer is earning Aussie $$, and generally, does not need to compare with Origin prices, he is happy to pay what is asked.
    The UK pound is down 40% on the AU$ since the start of the GFC.
    The UK on road price of a Discovery 4, 3.0L, is AU65,017.
    The Australian asking price, for the same vehicle is AU$ 91,238, or there about. End of story, I don’t buy anything here. If it can be shipped, even at the same overall price, I would rather pay them, than the ‘Rip Off Merchants’ here.

    July 1st, 2011 at 12:40 pm

  13. Ben says:

    Yeah tried to buy a new prado diesel, plus a premium on it plus $10000/$15000 diffirence between dealers on the changeover price

    July 1st, 2011 at 12:42 pm

  14. Neil Cox says:

    This stuff is completely infuriating. Not only are we being ripped off, but it is also encouraging the grey import market to the detriment of local traders and car safety. Suggest ACCC take a good hard look at this issue. Mr Samuels, wake up and take notice!

    July 1st, 2011 at 12:46 pm

  15. Richard T says:

    Very interesting data. Happy to add my “digital signature” to this campaign.

    I wonder if you have looked at prices of light commercial vehicles too?

    July 1st, 2011 at 12:57 pm

  16. Brian Howard says:

    All we need to do as Aussies would be to buy Holden and Ford for just one year, as a nation, and send the message to the ludicrously high priced Euros that we won’t take it up the rear end any more. One year is all it would take giving the Euros a wide berth and they’d get the message they’re not welcome here while they want to treat Aussies like milk cows and idiots. What’s wrong with buying FPV GT-E’s and F6-E’s, Calais and Caprices for a year. The return to value for money Aus cars would shock a lot of Euro buyers back to an agreeable reality. Then they could start enjoying the hardware performance in their cars and not worry what other people think of them for not sporting a ridiculously over-priced Euro badge just for the ‘perceived’ status. C’mon Aussies – blackban the bastards who are taking advantage of us!!! – just for a year and be surprised at the result!!

    July 1st, 2011 at 1:03 pm

  17. Mel says:

    Last year we looked into buying a 2008 or 2009 Chevy Avalanche LTZ 4×4. At the time, the price in the USA was less than US$50,000. To buy one here, professionally converted to right-hand drive, was AU$110,000 + ORC. We can’t find a vehicle in the Australian market that has the same features. I would expect that the 2011 model should be the same price or less here now since they are selling in the US for around US$45,000.

    With the AU/US exchange rate prices should be coming down. A certain kitchen appliance, made in the USA, recently went up in price here and the attachments for the appliance are in most cases more than double what they cost in the USA. I bought all my attachments from for less than half price, including postage.

    July 1st, 2011 at 1:04 pm

  18. Greg Craven says:

    Like DVD’s and other goods, if the Government lowers the costs for individuals bringing in their own cars from foreign markets, we will see the rip off evaporate very quickly. It is all about competition at the end of the day and the current restrictions on private car imports are well overdue to be overhauled. There is no incentive for the Government not to make this change.

    July 1st, 2011 at 1:04 pm

  19. Peter Newman says:

    What is to stop a group getting together to import a batch of (say) Subaru Forestors from the USA?
    Even allowing for the shipping costs, 10% Import Duty and GST, this would still provide a saving of approx. $8k.
    Question is- how to organise and is it worthwhile with all the hassle?
    Probably more lucrative for Luxury cars, IE Mecedes ML500,where the savings would be more like $40k!

    July 1st, 2011 at 1:05 pm

  20. Charles Elliott says:

    Surely there is a good business here for anyone prepared to import right hand drive luxury cars from the US and sell them in Australia. This business flourished between Europe and the UK in 90s when there was a huge disparity in prices and I’m sure it can’t be long before some enterprising individual starts the same thing here.

    July 1st, 2011 at 1:06 pm

  21. Grouchy says:

    The answer is obvious, they send all the faulty ones to USA and only the ones with the steering on the correct side here. That must be it.

    Good article – no wonder car dealers are smiling.

    July 1st, 2011 at 1:18 pm

  22. Brian Howard says:

    One further thought on buying Aussie for a year. How many times have you seen one of the aformentioned style victims getting around in their asthmatic 1.8 or 2.0 litre Euro box after paying the same or more than what they could have for a much higher spec local beast. Just think – what they paid for the baby Euro car that can ‘just’ make it up Mount Ousley and they could have had an F6-E with much more room, better looking and over doublr the performance. You know, sometimes I think these style status victims would be happier if they could distil their little ‘badge’ down to a key ring and not have to go through all that messy stuff called car ownership. Just as long as everyone ‘knows’ I can afford a BMW (even an asthmatic one) then I’m happy. These people should not be referred to as dedicated car owners. These are the type of people who cause this problem this blog seeks to address – these gooses will do anything to afford a Euro as a misplaced status symbol. It is these people who feed the greed of the Euro makers and keep the price of these underspecified dinky cars at the high levels we see.

    July 1st, 2011 at 1:19 pm

  23. Su says:

    I am glad that this subject has been brought up. Most Mercedes Benz and VW cars imported to Australia are made in South Africa, not Germany, and this is done to reduce the cost of production. The distance to ship them to Australia is not that much further than shipping them to Europe, so how can they claim the cost of shipping as an extra expense? Well done, PF, for bringing this to everyone’s attention.

    July 1st, 2011 at 1:22 pm

  24. Geoff Hardie says:

    Having just returned from a 6 week holiday in London I noted first hand this issue. I am not sure being ripped off is the correct terminolgy though. Our much smaller population spread over a much wide geographical area has a lot to do with it, Dealerships in Australia can never hope to sell the same volumes as their UK counterparts yet basically have the same overheads and as a result need to charge higher mark ups.
    This economic issue is not readily understood by Australians who advocate for zero population increase in Australia. We certainly do not have anywhwere near the same population density as is the case in and around London in particular.
    Higher population equals greater sales therefore lowering overheads.

    Geoff Hardie

    July 1st, 2011 at 1:24 pm

  25. Glyn Evans says:

    Just returned from US> How the hell can I buy a new RHD car from the US and import it? I found most cars less than half the price. Even the Camry which is made in Oz and exported to the US!!!!

    July 1st, 2011 at 1:26 pm

  26. David Clarke says:

    I agree with Geoff Smith’s statement and suggestion. I have been following these price differences for around 3 years, by comparing similar spec vehicles (as far as is reasonably possible) in UK and USA. We are certainly being ripped off and the issue must be exposed and I think Private Fleet is in a good position to lead the charge.

    By the way, we are also ripped off on many other imported goods which is why I purchase online from very efficient overseas suppliers which is not good for Australia. In many cases there are too many in the supply chain between manufacturer and the customer and it only takes one of those links applying a large markup which will create a high price to the end customer.

    July 1st, 2011 at 1:53 pm

  27. mick says:

    intresting to note that holden was not on your list,even though you can buy one in the states rebadged for less dollars that we pay here! and they have to get it all the way over there . So the profiteering is not just from overseas companies .yet there is no mention of that in your article !Hmmm food for thought

    July 1st, 2011 at 1:55 pm

  28. manuel martinez says:

    Even in specifications they are duping th Aussie car buyer. I bought a brand new Mazda 2 Neo, ans was only supplied with one (1) remote-contoll key. Even after numerous conversations with Mazda Australia, they point blankedly refused to supply a 2nd key. Even after I called 4 separte spare department around Brisbane & ALL the parts guys assumed that you got 2 remote controll keys. Mazda are pathetic.

    July 1st, 2011 at 2:17 pm

  29. Julian says:

    SO glad you are taking this up, it is outrageous and there is no other word for it.

    By observation I can give one example and a good theory as to what is happening…

    When the new Landrover Discovery 4 was released in Australia, the base model was $68490 list including GST. Since then the Australian dollar has appreciated 16% and is holding solidly there. The price of the same vehicle is now $68490 list. That is, no change at all despite a change in the dollar of 16%.

    The current comparison between base models in AUD is

    UK – AUD46200
    AUS – AUD62300 (excluding gst)

    Aus price is 35% above the equivalent UK price, excluding all tax effects. BUT even worse, remember that the UK version has the bigger and newer engine in the base model, which costs perhaps an extra $7000. (half of the extra $14,000 we have to pay to get the bigger engine in the next spec level up). So the real comparison is:

    UK – AUD46200
    AUS – AUD69000 (excluding gst)

    And the Australian car is 50% more than the same car in the UK — BEFORE TAXES

    The proof of the ripoff is the fact that over nearly two years as the AUD has appreciated, the price hasn’t changed. I don’t believe any importer would have hedged their currencies to that extent, so this is pure gratuitous profit.

    The reason they haven’t changed prices from Landrover Australia’s perspective is that they don’t need to – people are still ordering more than can be provided. The reason people still order them is because other equivalent cars are equally expensive, and haven’t changed since the currency realignment either.

    And in my opinion the reason that no-one is changing their prices is because there is a default cartel operating, in which no one has to say anything, but no one reduces their prices either. So all manufacturers are holding their tongues and holding inflated prices, hoping other manufacturers don’t break the cartel, and ripping us off in so doing.

    As soon as one becomes reasonable, others will have to follow to remain competitive, but until then – what incentive? None.

    The more noise you can make about this the better, it’s time importers were held to account.

    PS I wrote to Landrover Aust about this at the end of last year – their answer indicates they have no intention of changing things, and shows their willingness to hide behind taxes etc which are NOT the reason, since the same taxes, charges, freight and insurances applied when they set the price at old exchange rates.

    Please allow us to confirm that our vehicle pricing is dictated by a number of factors, not only by the current exchange rate. These factors include, but are not limited to, local stamp duties, on road costs, Federal Government Luxury Car taxes, freight, insurance on freight, and import duties.

    As the National Sales Company for Land Rover in Australia we have our prices agreed upon by Land Rover UK and these are based on numerous business metrics including volumes and many of the extra costs above. The pricing we have now will be continued and won’t be reviewed in the near future.

    July 1st, 2011 at 2:19 pm

  30. Colin MacEwan says:

    AUD/JPY at the start of 2008 ~60 now 85 … would expect a reduction in price of 40%
    Tried to order a new Subaru recently … No stock available – delivery time 3 months !
    So obviously they can’t use the excuse that their stock is at old exchange rates.

    Yet the price of Subarus just keep going up every year … Checked the Japanese price – even cheaper than America and more stringent emission requirements.

    A friend at Mazda let slip that Australia is Mazda’s most lucrative country …

    So it is not only the dealers here but the manufacturer O/S that are to blame !!!

    July 1st, 2011 at 2:29 pm

  31. Harry says:

    A Toyota Kluger Grande is miles ahead of the Mercedes ML series & half the price


    July 1st, 2011 at 2:44 pm

  32. Nick says:

    All government needs to do is allow Parallel imports i.e. so I could just buy 1 in UK, Japan, Dubai or SA(tax free) and import it to Aus and pay relevant taxes, or set up a company to do so. Can you imagine how much money is going overseas because this is allowed to go on, can’t see that is in Australia’s or Government interests. For every Lambo sold here 3o0,000 extra of drug dealers money goes to Germany, for every AMG mercedes extra 50-100,000 of Fat cat Bankers money goes overseas. It must add up to Billions each year going overseas the only advantage is LCT as its a tax these people find it difficult to avoid, and would otherwise pay verry little Tax.

    July 1st, 2011 at 2:50 pm

  33. Sub says:

    Good research. Very IMP for us to be aware of the scale of the rip off. In fact the story is same for most goods and services that we get in Aus. I wish there is a lot more competition in this space to pass the benefits to buyers.

    July 1st, 2011 at 2:51 pm

  34. David Milton says:

    While on a visit to UK in May/June 2011, I visited a Mercedes Dealer to price a one year old Mercedes B200, the UK price 10,100 pounds on road, thats in Australian Dollars $22,000 . On my return to Australia, I went to a Mercedes Dealer he wanted $53.000 for the same one year old car a B200. The car in UK was better fitted out, except the car here had leather seats, the one in UK had cloth seats.

    I phoned the dealer in the UK, and he stated that on second hand cars in UK, you cannot add the sales tax back on when you sell it, only the first person who buys the car, pays the tax to the Government, and after that, the value of the car is tax free.

    The problem seems to be in Australia , is because the added tax to a new car is so high, the person selling it, needs to get back some of his investment in the car.

    In the UK you can purchase second hand Mercedes say year 2000/2001 2002 from 1500 pounds to 3000 pounds. Here the same cars sell for $18.000 to $30,000.

    WHY ? David.

    July 1st, 2011 at 2:58 pm

  35. arthur says:

    Happy to add my digital signature to support this story but I refute your comment that the Australian car buyer seems happy to wear it, the comments above clearly indicate the opposite.

    July 1st, 2011 at 3:02 pm

  36. Brian Price says:

    The same goes for parts I’m going thru the exercise of having the timing belt changed on myMY05 Forester

    Cost in Oz $154 genuine part cost from a Subaru dealer in USA, same engine same part $ 47 US about $42 AUD

    Cost of labour at my local Subaru dealer $135 per hour. cost of labour at my tame mechanic who has looks after my 3 cars, 2 of which are still in warranty $80 per hour
    I wonder what US labour rates are like, UK is expensive I think

    July 1st, 2011 at 3:04 pm

  37. bryden dickson says:

    we seem to be a nation of sheep, we have twice as many politicians as uk, and twice as greedy. they do not pay for cars or fuel, and get large payouts when they leave politics after they cripple the country. bob hawke, paul keating, so importers of cars charge out of control, then the goverment charge the public, and we fall in line again. do you think we deserve better?

    July 1st, 2011 at 3:19 pm

  38. Sanjay says:

    Thank god that finally someone raised this issue to a international level. I own a Chrysler and when compared with US pricing, I though I could own 2 of the top end models.
    But reality is , we here in Australia never bother about price tag. We would afford it irrespective of such a big difference when we dream it.
    We would pay car premium for 7 to 8 if not more years where in other countries they buy cars as if they were buying cakes.
    Please protest and let every Austrlia get a chance to own their dream car.
    This will result in high income towards Rego, insurance, tyres, road worthy etc which all reflects boost in government income.

    July 1st, 2011 at 3:24 pm

  39. Tony C says:

    I totally agree with all the comments and the general conclusion that Australian buyers are well and truly being ripped off. I had the pleasure of driving a Ferrari 458 Italia whilst in Italy recently………………new car price there was 210,000.00 euro. Price in Australia $550K plus, that is more than double the European price. WHY! I don’t know what is happening with our country, we are supposed to be the “lucky country” and whilst it is undoubtedly the best place in the world to live, it is becoming more and more difficult to survive in this country. I could not believe the price and quality of food in Europe, the cost of dining in a restaurant, the cost of food generally, clothing, cars…………it made me envious. So what is the solution……I like the idea of a buying strike……..we all go a buy a Ford or Holden and then maybe the other manufacturers may catch on.

    July 1st, 2011 at 3:30 pm

  40. Greg Lewis says:

    I agree with Geoff Hardie’s comments but also agree with Private Fleet’s assessment of the overcharging. So who is inflating the prices? I would suggest that both the manufacturer and the wholesaler ought to be scrutinised.

    Maybe the government is more interested in propping up the local car industry and higher prices obviously help it along. Apparently local production is down recently and imports rising (for fuel efficient cars) – (see Ibisworld) – which helps explain why there is parity in small car pricing.

    This problem occurs in other industries as well – note the article by Channel News
    Consumer Electronics & IT Companies Targeted By ATO

    Of course in the situation above the ATO is also missing out, hence its investigation. The car industry may be a little too political. Nonetheless, take up the challenge please Private Fleet!

    July 1st, 2011 at 3:34 pm

  41. Richard Cowan says:

    Aussie have typically paid through the roof for (especially) European cars.
    My thoughts on why we get ripped off:
    – We are RHD, where most of the world is LHD, so a relatively low volume business.
    – We are a very long haul from the countries producing cars.
    – We’re a tiny market, with vey few economies of scale for the manufacturers/distributors.
    – We have some rather odd design rules makers must conform to.
    – Euro cars in Oz are often far better equipped than those in the US/UK (their options are always fitted as standard in Oz to relieve sticker shock.
    – We normally have a low value currency (still the case compared with US/Euro), which translates in to a high local price.
    – Overseas, winter salt on roads rusts cars very quickly, so many people only keep their cars a short time, enhancing sales. Oz has 1 of the oldest car fleets in the developed world, because many people don’t want to pay high prices, thus depressing sales.
    – Americans for example are used to paying nothing for cars (as the home grown ones are rubbish), and they expect even quite fancy cars to be pretty cheap.
    – No, the ridiculous taxes such as LCT don’t help!

    July 1st, 2011 at 3:37 pm

  42. Trevor says:

    Another thought to the conversation.
    Australia is one of the largest iron ore miners in the world.
    Where does the ore go?
    Japan,China, Korea at least not sure about US or Europe
    However we then buy our cars from these countries
    ….made from our ore!!
    What about,Ford,Holden and Mitsubishi our own car manufacturers?
    They get their Steel from overseas….Made from OUR ore.
    Just another thought

    July 1st, 2011 at 3:57 pm

  43. Stephen Patterson says:

    Are their any organisations like yours lobbying the government.

    I agree with Brian Price that we aren’t happy but I don’t believe we have been educated enough to realise it is a real rort as oppossed to the conspiracy theories that cover just about every subject

    July 1st, 2011 at 4:48 pm

  44. Simon Boeyen says:

    Great research and report. The problem relates to other areas as well. If I may give 2 examples,. Just bought a new computer, an Lenovo A320, for $1777 from exclusive dealer, Harvey Normam. Discovered later very same computer sells for less than US $700 in USA! A new Windows 7 book had a local price of $78.95, I paid $52 after discount. On removing price sticker discovered US price was $29.99.! Online purchasing in future, you bet!!

    July 1st, 2011 at 4:48 pm

  45. Trev Garnaut says:

    Yes…I know I have checked out the drive away prices in the USA for a Nissan 370Z Auto Coupe. 32,000 US Dollars in USA ……. in Australia 79,000 Australian Dollars. I was in the market for a 370Z…….but not now.
    Trev Garnaut

    July 1st, 2011 at 5:35 pm

  46. George says:

    Marketing is all about getting the highest price for an item that the market will bear under the prevailing rules. A lot of this probably comes down to the agreement between the the importer and the manufacturer. The comparison for cars with the UK market is very valid for anything not sourced in the UK because this eliminates the RHD/LHD issue. Our relatively small market will add costs, but I’d like to see someone with inside information indicate at least the relative costs that say a UK importer pays versus an Australian importer for a similar product. The low end cars are little more than commodities and this shows in the pricing similarities between countries, part of the appeal to some people is that owning a perceived luxury item is that it costs a lot and other observers should know this. If a buyer wants to enjoy the safety and engineering features of up market cars they have to pay for the snob value whether it applies to them or not. There should be changes to the rules to let prices at the middle and high ends drift down by allowing increased competition. On the parts side our small market will mean some increased costs, but much is way over the top, when I go to buy parts I don’t need to be served by a man in a suit and tie in fancy premises that are part of some flash marketing real estate and be offered brewed coffee and glossy magazines to read. Keep up the investigation with as much factual information as possible.

    July 1st, 2011 at 5:35 pm

  47. Johno says:

    Yes, a good piece of research. Tells me something I already new – us Auusies are being ripped off! This applies to most things. I buy buy everything online from overseas wherever possible. This includes, DVD’s (usually half price on Amazon UK and often with free postage), tools, computers, clothes etc.

    July 1st, 2011 at 5:45 pm

  48. Damo says:

    Before we even get to the real value we have to add in:
    1. Protectionism;
    2. Import Duties;
    3. Luxury Car Taxes;
    4. State Taxes;
    5. Stamp Duty;
    6. Profit
    You’re kidding yourself if you think the government will reduce a revenue source such as a tax or duty?
    For a better comparison you should look at other countries such as NZ. They would suffer the same issues with respect to remoteness and worse with respect to economies of scale.
    Have a look at what you buy a car manufactured (eg. camry, commodore, cruze, etc) in Australia and exported against what it is charged in the country exported to.

    You should compare to NZ.

    July 1st, 2011 at 6:13 pm

  49. Damo says:

    It is not just cars we are ripped off in nearly all products.

    I bought an online product from an Australian based company and found out it was 40% cheaper to buy it onnline from the USA. Fortunately they matched the price but how many don’t query these things and pay much more. Cars are obviously a big ticket item so letys get something done about this.

    July 1st, 2011 at 6:18 pm

  50. Roxane Paczensky says:

    This is something I have suspected, but was unable to prove, or do anything about as an individual. I’m glad to see someone has at last provided the evidence and launched a campaign that allows disgruntled consumers to act collectively.

    July 1st, 2011 at 6:33 pm

  51. Fab's Car Detailing Gold Coast says:

    You think this is bad? You should see back in Brazil how much people are ripped off by importers. If we don’t make some noise it will just get worse.

    July 1st, 2011 at 7:57 pm

  52. Fab's Car Detailing Gold Coast says:

    btw this should go to aca, today tonight, maybe then we can put a break on these ridiculous profit parties. Good job PF spreading the info.

    July 1st, 2011 at 8:05 pm

  53. Michael Coverdale says:

    I agree with the sumation above on pricing in Australia. It is a disgrace and rip off. I personally know some of the owners of dealer ships in my local area and they have grown enormously rich within our local community. Our local community is not a big city but a rural area. I think that we should purchase cars maunufactured in Australia and support our Australian industries. Our cars are good and in some cases the equal of most of the “luxury” cars imported. It does not end with the cost of the cars as servicing and spare parts are just as bad.

    July 1st, 2011 at 8:58 pm

  54. STL says:

    Too bad we can’t buy cars online!!!

    July 1st, 2011 at 9:18 pm

  55. Davo says:

    10 years ago I bought a $15,000 throwaway Korean shoebox for around town work and have never regretted it. As you would suspect it is well due for replacement and I will be doing the same again.

    I cannot understand how so many people are claiming that they have not known about this blatant rip-off.

    July 1st, 2011 at 9:26 pm

  56. Mike says:

    Its not just cars!!!
    Do the maths on electronics and pharmaceuticals!!!

    July 1st, 2011 at 9:41 pm

  57. blaze says:

    we are being shafted,were are our lemon laws , none.having travelled overseas to cyprus(be the way they drive on the left) a few years a go was amazed to see all these japense cars there, my friend had a dual cab nissan when he told me the price i didnt believe him, apparently japan second hand imports are very cheap.japan people drive on the left too.!!1It beggs the question why we cant import second jap cars here!!the japanse dont keep ther cars for long because they get in australia someone as already posted e keep our cars the longest, its embaressing to go to almost third world country turkey and see all these nice cars while we drive the old bombs

    July 2nd, 2011 at 12:07 am

  58. terry says:

    yeah yeah Australians have been ripped off for years and will continue to be until the go on a buyers strike to demnand equality. Australia is seen by manufactureres as an easy target as it is een as a comparatively less competitive market, Sadly. Stop being the sucker Australia!!!

    July 2nd, 2011 at 3:48 am

  59. terry says:

    “Fab’s Car Detailing Gold Coast”
    Sadly you must realse that ACA, Today tonight, etc, are all paid advertisements!!!
    They dont actually investigate or report as such, contrary to popular belief.
    Sadly this just shows how much we believe in our bought media machine. Maybe this is why Australians as a rule have no sense of whats real or what represents TRUE Value !!!!!

    July 2nd, 2011 at 3:56 am

  60. terry says:

    Cheap or expensive car, it doesnt matter, the price difference should be the same !!!
    It not about percieved luxury – thats just marketing speak.

    July 2nd, 2011 at 4:02 am

  61. BIGROG says:

    Well done PF for starting some affirmative action. Just because we don’t stand up we are continually F’ed In the A in Auatralia as the corporations harvest our hard work and responsible attitude.Should boycott the lot of them !. Watch Zeitgeist on youtube and join the voices of the concerned !!

    July 2nd, 2011 at 4:47 am



    As someone from the retail sector I can tell you it’s not from this end. Margins are at all time low. The only winner’s would be the government’s both state and federal and yes perhaps manafacturers. But a viable motor industy is integral to our economy.

    This public perception something i’ve dealt with for 15 years and still makes me laugh.

    What about the profits of novated lease companies and their hidden charges are they sunject to public scrutiny. NO

    July 2nd, 2011 at 8:27 am

  63. S N says:

    I worked for a major vehicle manufacturer in Australia for many years and the Marketing Department dictated the price of a vehicle against the segment it was targeted at, simple as that is has nothing to do with taxes, blah, blah, blah or anything else!!! I have seen this first hand in real life, it will never change. Vehicle import duties have reduced by nearly 20% refer to the Button Report once Minister for the former Hawke Labour Government, which as a consequence resulted in one manufacturer moving their whole manufacturing operations off shore and effectively putting 4500 direct employees and another 25-30 thousand indirect supplier employees out of work and that’s a fact! The marketers sit around a table analyse the data and statistics and that’s what the public pay. Marketers are very happy when the import tax component is reduced because as a buying public we are used to paying the money so they back fill to increase profits. It’s not just vehicles it’s every product you buy, for example why can I buy a T-shirt from China over the internet for $2.50 approx plus postage and then pay $30-$120 dollars at a retail store, I realise that there is cost in running a retail store such as rent, wages etc but really how much mark up is reasonable. Further to this I refer to the recent campaign by a major electrical retailer and “I think” we all know who I am referring to and he screamed unfair, unfair that Australians could buy the same products they sold for between a third half price over the internet and that retail group was publicly lobbying the Aus Government to collect GST on all products imported under the current $1000 dollar threshold that currently exist! That was until the Australia buying public stopped walking through the door of their retail outlets and said person actually stop lobbying because of consumer back lash. In other words if the Australian Government had complied with that retailer of implementing their request, do think they would have reduced prices “NO” they would have increased them, surprise, surprise. Does Australia produce any high tech electrical products any more? “No” is the simple answer!!! Marketers and retailers set the price simple as that!!!!! Australian Design Rules (ADR) may have an effect on this and economies of scale also but it is minor really. The American market is very competitive 300 million people VS 30 million in Australia think about why America pays less for cars because the marketer know they wont sell the cars because the American consumer will not pay the money, “Marketing sets the price” Don’t worry Australia soon there wont be any vehicles produced in a Australia then we will be at the mercy of overseas Marketer. Question do you think they will reduce prices when they have a monopoly? HAH.

    July 2nd, 2011 at 9:39 am

  64. David says:

    I don’t think anyone is saying that dealers are raking it in, rather the parent companies.

    Why the MX-5 for example has always been so much here is crazy. And in the last 5yrs it’s gained another $10k in price. Probably cause we don’t have many convertibles like it here like Europe and the US but that is changing as we speak.

    July 2nd, 2011 at 10:04 am

  65. bob says:

    Always wondered how dealers paid for their prime sales sites ,when they have factory invoice cost plus $1 sales ???? factory must reimburse ? certainly a big price ripoff , just cant source aussie made 4wd utes . bugger

    July 2nd, 2011 at 12:10 pm

  66. Dan Turner says:

    I agree with most of the posters above. Unfortunately, this situation will not change in any way, until legislation is passed so we can purchase new cars and imort them ouselves. There are always people willing to pay the premium for status symbols, (and if anything, the inflated price for luxury cars in particular), only encourages those who purchase cars as a means to showcase their wealth.
    I cannot justify the bloated price of some of the luxury models, despite their superior performance, especially when I know what the price would be if I was able to import them directly, and pay any duties etc.
    I am with one of the other posters; if soemone can organise a shipment of luxury cars over here, I would certainly be on board. I know it would be a hell of a lot cheaper than buying in Oz!

    July 2nd, 2011 at 12:45 pm

  67. tom chittick says:

    How long does this blatant ripoff have to go on ? Well the politicans have to make up their super some how and as long as we have cars both the politicans and councils will find ways to rip the money off us.

    July 2nd, 2011 at 12:50 pm

  68. hawil says:

    Nothing surprises me in Australia because our politicians do not care about the general public.
    As a pensioner the government makes sure that I,am not in the new car market, they even make sure that i cannot afford bananas; yet Paul Keating talked about Australia becoming a Banana Republic.
    The more comments on this article may help to make some changes to the rip-off.

    July 2nd, 2011 at 2:03 pm

  69. Frank says:

    Just returned from Europe, – Germany and Austria – .

    The difference in prices between Europe and Australia is even bigger than comparing only the UK. UK is traditionally more expensive that any other European country.

    Just an example Alfa Romeo Giulietta 1.4 manual is 17.990 euros (approx AU$23,000) , the same car here is $39.990 plus on road costs.

    But the price difference is the same in every aspect of life. Electronics, Shoes, clothing and most importantly supermarket prices are 50% – 70% cheaper in Germany and Austria than here.

    Wages in Germany are the same as here so you can see why they live some much better than us here. (Average wage is $40,000 Euros.)

    No wonder that so many European background Aussies deciding to leave Australia and move back to Europe for good. Is that what we want?

    Well done PF, take this issue to the top and do something about it.
    It is just unacceptable.

    July 2nd, 2011 at 4:10 pm

  70. Richard McGee says:

    The dealers are doing alright, just look at their big new showrooms. I don’t care what the reason is for the inflated prices, the fact is they are inflated and as long as greed is a human trait and the public keep buying the product without complaint, the dealers or whoever,won’t change a thing. Motorcycles are in the same boat.

    July 2nd, 2011 at 4:19 pm

  71. Euro Driver says:

    If you want European quality buy a Saab. Their value drops like a stone from the stupidly expensive price they are sold here as new, and they are not bad at all.

    July 2nd, 2011 at 4:58 pm

  72. Michael says:

    Better price rip off examples can be found by comparing the following brands:

    Volkswagen UK vs Volkswagen AU
    Audi UK vs Audi AU

    Passat CC and A4/S4 are very similarly priced in the UK (A4 with a slight premium). A4 and S4 have a big premium here, particularly the top end.

    Remember all of the above cars are made by the same end company.

    July 2nd, 2011 at 9:25 pm

  73. Steve says:

    good work pf. keep the bas****s honest.

    July 2nd, 2011 at 10:34 pm

  74. K.K. Chan says:

    Why can’t we import a new car for personal use ? Happy to pay all Duties and taxes as per existing rule.

    It is time for Government to rethink the whole rules and regulation.

    July 3rd, 2011 at 9:20 am

  75. CGL says:

    I can only assume you’re chasing some publicity guys? There are many holes in what you’re saying and you’ve jumped to a premature conclusion. I’m lucky enough to be on the inside of the car industry in Australia and although you’re correct on many points, your overall analysis and reasoning is flawed. Regardless, do you know how many manufacturers are selling cars in the country? Or how many models are available? Or how many versions of models exist? The competition is there, it drives down the prices, there is nothing untoward going on, and do you want to know the funny thing? The BUYERS determine the price of cars, not the manufacturers. Chew on that and see what comes on in the cud.

    July 3rd, 2011 at 2:42 pm

  76. Jake075 says:

    very simple for 2 reasons.
    1. The insurance cost of a “grey import” is substantially higher
    2. The re-dsale value is between 20-50% less.

    So the overall value equation if negative if having the car for a small amount of time due to crappy re-sale, and if long tern, the insrance negates any gains made with the purchase price.

    July 3rd, 2011 at 6:33 pm

  77. Rob Clark says:

    There should be a way that a private citizen can purchase a new car oversea’s and then import it for their own use, that would be one way to get past giving the greedy manufacturers the extra dollars. Does Jeremy Clarkson have any ideas on this? He usually has some good answers to help us poor downtrodden motorists.

    July 3rd, 2011 at 6:34 pm

  78. Chris says:

    I’m not surprised. Almost everything in Australia is more expensive. Car pricing has nothing to do with cost. Companies charge the maximum they can, that’s just good business practice.

    Instead of crying foul, all we have to do is research and don’t buy overpriced cars – but that goes against our ego. After all, we want to impress our neighbour with what we can afford… Hence some products actually sell better if they’re more expensive.

    July 3rd, 2011 at 8:49 pm

  79. MARK says:

    i have been buying 2 news cars per 3 years for my family/personal/small business
    fleet and most of the time puchases are done in june/sept/dec when the sales are on. if everyone only bought cars when heavily discounted it certainly would help drive prices down at other times. its also getting harder to find a new car that doesnt have inherent defects, while we dont have lemon laws our motoring importers can continually bring crap into this country at inflated prices with no protection . next time you are considering a new car do an online search for potential problems with that model. i work in the MI and i am continually horrified at the quality of a large portion of our vehicles available in this country. one of my cars is an australian built large utility and is 7 years old now and run faultlessly, i am too scared to replace it with a new one

    July 3rd, 2011 at 10:46 pm

  80. ib says:

    Buy Australian. For 35 k you can buy a very comfortable and quiet falcon xr6. BMW merc are just status symbols.

    July 4th, 2011 at 7:42 am

  81. Jonathan Adcock says:

    I wrote to Nick Xenophone a few months ago over the same issue – I have a Porsche Panamera that I brought in the US for less that $AUD80,000. In Australia I was quoted $300,000+ for the exact same car! He was not interested – his staff advising me that “they thought this was to do with protecting the Australian car market”… when I wrote back rebutting that argument that the US has significantly more car manufacturers than we do but sell Euro cars and event Australian made cars cheeper than we do guess what… No response!!

    The main issue, from my investigations and discussions with dealers, is that car companies can get away with it! They argue that to make the same sort of profits they do in the US (ie dealers in the US selling 10 cars a month compared to 1 or 2 a month here) they have to charge more to make their profits! The reverse argument that if they sold them for the same price here as they do in the US they would sell more than 1 or 2 a month was met with the response – ‘but people who already own a Porsche would be annoyed because their cars would be worth less!! How ridicules is that!

    July 4th, 2011 at 8:46 am

  82. Jonathan Adcock says:

    It’s called having a choice IB! Not dictated to as to what we can drive…and the comment of a BMW being a status symbol…get real!! how about safety, reliability, performance, equipment etc. That’s what you get with a BMW. I drive a Skoda because it has all those features for less coin than a commodore. Plus better engineering, performance, economy etc (made with all VW and AUDI running gear). If Holden or Ford could produce a comparable product then I would consider buying it…but they DON’T.

    July 4th, 2011 at 8:53 am

  83. Troy Murphy says:

    Fare Go
    I purchased a new Subaru wrx Premium in March of this year for a little over $ 50000 on road for my wife , I now find it very disapointing that we have been ripped of by the manufacturer & wholesaler paying a claimned 107% premium for being an Aussie

    To the government we need to sort this out ,so the many Australian tax payers that that pay your wages arent continually ripped off

    Whilst we are very happy with the new vehicle ,the sour taste that remains after finding out people like us & so many others Aussies have been ripped off will ensure I never purchase another Subaru

    Thanks for the update I feel cheated , However keep up the good work & perhaps we can prevent other Aussie’s from making the same mistake , By Australian

    July 4th, 2011 at 9:18 am

  84. Julian says:

    CGL – my earlier post demsontrates that you are not right in saying that buyers, not sellers, determine the price of cars. My example of the Landrover proves this incorrect. This car was released at a certain price, since then the Aust dollar has appreciated a great deal. The price of the car hasn’t changed a jot. Prices are FIXED by marketeers and in Australia and this is supported by an unofficial cartel, where manufacturers tacitly agree not to change prices even after long term currency changes.

    How can prices possible remain the same over nearly two years despite 16-30% changes in the dollar? Where is consumer power evident? Where do you see importers changing prices in response to anything other than what they can get away with, and how can you demonstrate that there is not an informal cartel operating?

    July 4th, 2011 at 10:50 am

  85. Ed says:

    I congratulate you on bringing this topic up for discussion. We have all known for a very long time that we were being ripped off. Your statistics prove it, and statistics do not lie. Well done. I hope your campaign bears fruit.

    July 4th, 2011 at 3:16 pm

  86. Bruce Oates says:

    I’ll add my digital signature to the other disgruntled motorists.
    I also hope we can get enough interest to get noticed.

    July 5th, 2011 at 4:53 pm

  87. Michael says:

    I think this is one of the best examples of Aussies getting ripped off.

    In the UK……
    Audi Q7 3.0TDI – GBP 40,995 ROTR
    Audi S5 Sportback – GBP 40,995 ROTR

    In Australia……
    Audi Q7 3.0TDI – AUD 98,055.80 Driveaway
    Audi S5 Sportback – AUD 144,909.60

    So S5 ripoff = AUD 46,853.80

    July 7th, 2011 at 8:23 pm

  88. Jeff says:

    This is the reason I have not bought a new car in Australia ever, I buy second hand vehicles & at one stage I bought a grey import from Japan – a Toyota Surf until the government stopped them being imported. Same story with other retail items – I can buy camping equipment for half the price we pay from the USA. Are we the sucker nation 🙁

    July 19th, 2011 at 11:34 am

  89. Dave says:

    I just recently bought a Mercedes C220 cdi (2008) for 55000.
    First and foremost I completely disagree with the comments regarding being snobbish. I bought this car because I liked it,end of story.
    However,after realizing the blatant ripoff we are subjected to in Australia,I feel gutted,why? because the car I drive has a perceived value of about 55k,when in reality it’s probably a 30k car (if that).
    I am that sickened that in a year I will trade this Merc in for a well researched vehicle i.e minimal price discrepancy between O/seas models,and will never,ever be apart of this blatant ripoff again.
    Thanks for opening my eyes.

    July 25th, 2011 at 6:52 pm