Australian car buyers may benefit from free trade agreement with Japan

Posted by: Cal on 15/04/2014

Category: General

Do you want to buy a new vehicle, complete with a set of brand new car tyres, but you're not sure if you have quite enough money to make the purchase?

A free trade agreement between Australia and Japan could be the answer to your woes, as it is predicted to offer significant savings for new car buyers in Australia.

The agreement, concluded Monday (April 7), will result in several benefits for Australians in many sectors, including farmers, consumers, and the overall economy.

Part of the agreement is the elimination of existing tariff on cars imported from Japan, which currently sits at 5 per cent.

This tariff will be eliminated altogether, and the automobile lobby predicts this could result in a drop in price of between $1,000 to $2,000 for a $30,000 model, according to an article published by ABC News.

Andrew McKellar, of the Australian Automobile Association, told ABC News current affairs program, AM, that a third of all new cars sold in Australia are sourced from Japan. This indicates a large percentage of new car buyers may be affected by the changes introduced by the free trade agreement.

Mr McKellar estimated consumers should begin to see changes in price relatively quickly, although it is currently unknown as to whether the drop in tariff will occur suddenly or over time.

"We've seen from past experience, when there has been a tariff reduction, it has been passed through in prices to consumers fully and quite quickly", Mr McKellar told AM on April 8.

Recent studies indicate fewer Australians are buying locally made vehicles and are instead opting for imports, a trend which may increase with the reduced prices of Japanese imports.

You will probably recognise some of the well-known names and brands associated with cars imported from Japan, with Nissan, Toyota and Mitsubishi all examples - so many buyers may be getting some bonus savings on cars they were already thinking of purchasing.

With a potential $1,000 to $2,000 price drop due to the removal of the 5 per cent tariff, consumers will almost certainly have a little cash left over to put in the bank for  tyre upkeep such as wheel alignments and tyre balancing. Whether you buy a new or used car, this is one area that simply can't be overlooked - after all, your tyres are your only point of contact between you and the road!

Savings on a new vehicle isn't the only area car owners may benefit - tariffs are also being dropped on household appliances, fruits and vegetables, electronics and some canned food products. Why not spend your extra coin on some tyre cleaning products to keep your wheels in tip-top condition?