NEW ZEALAND CLASSIC CAR PRICE ON ACC Levies
Greg Price What guarantee have we got that bad investment decisions in the future will not lead to further hikes in levies?
When ACC was first foisted upon us in the early ’70s, it was supposed to be a no-fault scheme — this meant that if you caused a significant-injury accident you were not personally liable for injuries to other parties. By comparison, in the US some people make a living out of being skittled while crossing the street, then suing the hapless motorist for zillions of dollars. Lawyers specializing in such litigation live very comfortably, thank you very much.
As far as I’m aware, no one was ever held responsible for wiping out the bulk of ACC’S reserves due to poor investment choices, the shortfall being camouflaged by the decision to make the ACC Fund ‘self-funding.’ In other words, the amount of money collected had to be sufficient to pay for the on-going treatment of an injured person. Thus, huge increases in the ACC levy were added to the annual cost of registering your vehicle, and ACC levies were applied to the price of petrol, with the intent of ensuring that those who travelled the most distances paid a greater share.
By the time you read this the new levies will have come into effect, and well done to ACC for earlier informing motorists not to register their cars beyond July 1, 2015. Mind you, as many learned about the decreases prior to Christmas 2014, ACC had little option but to publically announce the reductions.
In arriving at the new levies, someone decided that a safety rating should be used to determine the amount of each individual levy. If any of you have recently bought a vehicle from a car dealer, new or used — the car, not the dealer — the seller is required to display the vehicle’s safety rating. This is where it gets a bit dodgy. I have seen many a 4WD owner protesting the new rates for what they claim are very safe vehicles and, to be honest, some of the logic escapes me.
The good news for classic car owners is that from July 1, 2015, the total cost for your over-40-year-old vehicle will be (wait for it) a grand total of $71.65, down from $115-plus. So the collectors among us can now register three classics for what used to be the price of two! That’s got to be good news.
There is a website — rightcar.govt.nz — on which you can enter your vehicle’s registration number and find out how much registration will cost after July 1, 2015. Bearing in mind these rates are based on the safety rating of the vehicle.
I entered our trusty 1995 Mitsubishi Chariot and found that it will cost $238.45 annually, apparently because it hasn’t been rated. Next up was the 1995 Mustang GT convertible — for some weird reason it was only $198.20. Upon entering the details of our old exambulance Bedford CF280 with the factory-fitted Holden 202 and GM automatic (for carting the race bikes around) I found it is even less — $175.92! Surely, a 5.0-litre V8-powered muscle car is hardly safer than an old people-mover? And what about the ambulance? It’s the size of a small bus! And yes, it is properly registered as a passenger-carrying vehicle, not as an ambulance, which as I mentioned previously in an earlier article, is much cheaper.
There was much concern when these new levies were being mooted that some idiot would declare that all old vehicles are dangerous and therefore should be subject to higher levies, not lower ones. Good on organizations like the Federation of Motoring Clubs (FOMC), which I understand lobbied extensively on our behalf, and with clearly good results.
The bad news is that once it becomes known how much some owners of flash new vehicles are going to pay, these owners will start the lobbying process, so expect some changes. If the Minister is to be believed, then we can expect further decreases next licensing year — so don’t register your cars beyond July 2016.
Another interesting anecdotal statistic is that, working on the basis that campervans feature in a disproportionately high number of accidents (irrespective of who is driving them), one could expect that the ACC component of the licence fee for a campervan would be rather large. Not so, it would seem. And, having regard for the differences in the new registration fees for my own vehicle, it is evident that logic seemingly played little part in arriving at the new array of levies.
Finally, a message to those who might be tempted to invest in any future ACC levy surplus. The only people who make money on the share market are the major international fund managers. They even have programmes that scan the internet looking for keywords which might indicate that a particular shareholding should be disposed of, and the shareholding is automatically sold off. By the time we hear about it in New Zealand it is often too late — the share price has already spiralled downwards (after their sell-off, of course!). Profit taking is another aspect we have no control over. There you are sitting at home, watching your shares increase, when suddenly the price plummets. This is what happens when a big fund manager decides to sell off a portfolio at the top price, which of course starts the share price fall, and when it is low enough they buy back in. This is no place for our ACC Funds to be ‘invested’. The next time someone in authority makes a decision that effectively wipes out the ACC surplus, there should be consequences!
In the meantime, enjoy the cheaper rates while you can and, if contemplating buying another vehicle, run the plate through rightcar.govt.nz, and make your decision based on whatever is the cheapest.