Used imports no longer a bargain

Used imports no longer a bargain

Reports that used import prices are set to rise destroys the myth that ex-Japan used cars are a bargain, according to the Motor Industry Association.

Even with the Yen plummeting to new lows against the New Zealand dollar, used import dealers are reported to be struggling to find stock at low enough prices to enable them to be competitive in the New Zealand market.

“The used import trade is definitely coming out the other end of the cycle,” said Perry Kerr, CEO of the Motor Industry Association.

“Importers had a false market for fifteen years because they exploited the price gap that existed between the Japanese used car market and the overpriced New Zealand market, which was the way it was because of excessive import duty and sales tax on new cars,” Mr Kerr said.

“Now there’s a level playing field, because there hasn’t been any duty on new cars for seven years, and this is now reflected in the prices of new cars as well as New Zealand - new used vehicles.”

The New Zealand market is now experiencing the fact that importers are attempting to retail ten year old cars for 8, 9 and 10 thousand dollars, because that’s the minimum figure that will return them a reasonable profit on top of the purchase price in Japan and all the fixed costs.

“The reality is that a similar New Zealand-new car of that age can now be obtained for similar or less money, and with no question marks over its previous life,” said Mr. Kerr.

“The importers are effectively pumping up the price of the bottom end of the market, and if the reports we’re hearing are true, they’re about to pump it up even further. Fortunately car buyers have options and should be re-evaluating the economics of owing a brand new vehicle. Alternatively they can choose a used New Zealand car which is not affected by the price pressures,” he concluded.