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Car imports reform stalls

CHOICE says the Federal Government’s decision not to lift restrictions on second hand car imports is a hand-brake on competition

16 April 2015

Consumer advocacy group CHOICE has expressed disappointment at the Federal Government's decision to not allow more imports of second-hand cars from overseas markets.

The decision comes just two weeks after the Federal Government's own Competition Policy Review recommended removing parallel import restrictions on second-hand cars.[1]

The Motor Vehicle Standards Act 1989 (the Act) currently restricts second-hand vehicle imports, limiting the numbers of used vehicles automotive workshops can import and placing a $12,000 customs duty on these cars.

"While we welcome the news that the Federal Government is committed to deregulating the new car market, it is equally important that consumers are given access to cheaper second-hand cars," says CHOICE Campaigns Manager Erin Turner.

"Removing the restrictions in the Act would promote a more competitive Australian market for cars, and could have been a big step towards driving down the so-called 'Australia Tax'.

"We believe industry claims that second-hand cars pose a safety risk are overblown. Safety can be maintained by only allowing imported cars that are less than five years old, and that meet Australian standards.

"Purchasing any second-hand car can be a risky proposition for consumers under the current legal framework.

"Rather than throwing the baby out with the bathwater on second-hand imports, the Federal Government could have taken this opportunity to make Australia's overall second-hand car market more consumer-friendly," Ms Turner says. 

A CHOICE survey conducted last year found that 66% of people are worried about the price of car insurance and 36% had taken steps to cut back on the costs of running their cars over the last 12 months.

[1] See Competition Policy Review, 'Final Report', released 31 March 2015, p. 177:

"progressively relaxing restrictions on the importation of second-hand vehicles commences no earlier than 2018, having been preceded by the introduction of a regulatory compliance framework that includes measures to ensure appropriate levels of community safety, environmental performance and consumer protection."

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