Car Prices Set For Continuing Rise
The prices of both new and used imported cars have already started to rise as a result of the falling New Zealand dollar, and an acceleration in the rate of increase is inevitable, according to the Motor Industry Association.
`All the attention so far has been on the price of petrol', said MIA Chief Executive Officer, Perry Kerr. `With petrol being a weekly purchase for most people it is a much more visible expense, but the prices of new cars are subject to the same exchange rate pressure.'
The New Zealand dollar has been depreciating against all major currencies since the end of 1999, but in the past week it has plunged to new lows and is currently trading at close to a 15 year low against the US dollar and an all-time low against the Japanese Yen. With all new cars now fully imported, the entire effect of the exchange rate loss has to be reflected in pricing.
`There have been remarkable improvements in the fuel efficiency of new cars over the past few years', said Mr Kerr. `With fuel and car prices continuing to increase, now could be the most appropriate time to trade out of a less efficient older vehicle'.