NEW ZEALAND CLAS­SIC CAR PRICE ON Kiwi ve­hi­cle fleet’s age

Greg Price

New Zealand Classic Car - - Price On - By:

As many of you will re­call, I have of­ten talked about the av­er­age age of New Zealand’s ve­hi­cle fleet, and my life­time ob­jec­tive is to in­crease this av­er­age by rein­tro­duc­ing ve­hi­cles — mainly mo­tor­cy­cles — that have long since been re­moved from the NZTA data­base.

Why? Well, for as long as I can re­mem­ber, both the new-car in­dus­try and the used-car in­dus­try have been try­ing to get us to change our ve­hi­cles at least ev­ery five years — prob­a­bly for no other rea­son than to en­sure that those in the car-re­tail­ing in­dus­tries are kept in the life­style to which they have be­come ac­cus­tomed.

Un­for­tu­nately for them, a num­ber of fac­tors pre­vent this from hap­pen­ing — not the least be­ing one of pure eco­nom­ics. Re­mem­ber that around 80 per cent of all new-ve­hi­cle sales are to busi­nesses, govern­ment de­part­ments, and rental com­pa­nies, which means around 20 per cent of new-car sales are to pri­vate in­di­vid­u­als. Pri­vate buy­ers need to be able to ab­sorb mas­sive de­pre­ci­a­tion hits from the mo­ment they drive their new car out of the show­room — those with a bit of com­mon sense will look for a low-kilo­me­tre, ex com­pany car that has been over-main­tained at huge ex­pense. Th­ese cars of­ten turn up at ve­hi­cle auc­tions, and can be real bar­gains. By way of an ex­am­ple, I had a brand-new com­pany car pro­vided to me in 1997 — cost, $36,000 — and I was the only driver un­til 2005, when I handed it over to my suc­ces­sor. At that stage, the car had cov­ered just 67,000 kilo­me­tres. My suc­ces­sor had the car un­til 2007, when it was re­placed. When it came up for auc­tion, I suc­cess­fully bid on it with the ad­van­tage of know­ing ex­actly how much had been spent on it by way of main­te­nance. When my son re­turned from his big OE, I on sold the car to him, by which time it had cov­ered just 97,000 kilo­me­tres — a Ford, of course! Ad­mit­tedly, the car’s value is marginal at the time of writ­ing, but it is still in use and to­tally re­li­able, so why get rid of it.

“If it isn’t broke, why fix it?”

The above ex­am­ple is, I ex­pect, typ­i­cally why many peo­ple keep their cars be­yond the five years de­sired by deal­ers — as the old adage goes, “If it isn’t broke, why fix it?” In the time that I have been keep­ing records, the av­er­age age of the na­tion’s ve­hi­cle fleet has in­creased from just un­der 11.5 years in 2000 to over 13 in 2010.

Read­ers will re­call that I of­ten boast that re­turn­ing yet an­other clas­sic mo­tor­cy­cle to the roads le­git­i­mately is my small con­tri­bu­tion to in­creas­ing the over­all age of the fleet. Of course, other fac­tors are also at work here — not the least be­ing im­ports, be they Ja­panese or clas­sic Amer­i­can.

Re­mem­ber the late ’80s, when deal­ers were al­lowed to im­port Ja­panese cars en masse? The first thing re­moved from such cars were their emis­sion con­trols be­cause they ‘im­paired per­for­mance’. Then, over time, the au­thor­i­ties — LTSA, then LTNZ, and now NZTA — en­deav­oured to clean up th­ese im­ports by in­tro­duc­ing new emis­sion stan­dards re­lat­ing di­rectly to them.

Once they were in­tro­duced, they did not stem the flow of older im­ports. Last year, for ex­am­ple, the av­er­age age of used-car im­ports was re­port­edly eight years. The Mo­tor In­dus­try As­so­ci­a­tion (MIA) re­port­edly says cars that cost prac­ti­cally noth­ing in Ja­pan can be shipped here for $3000 and then sold for $5000–$6000. Reg­u­lar read­ers will re­call that I have made sim­i­lar claims for years — and re­ceived a fair bit of flak from ‘in­ter­ested par­ties’ for hav­ing made them. It’s nice to be fi­nally proved cor­rect. Un­sur­pris­ingly, new-car deal­ers are push­ing for even tougher used-im­port rules.

It seems that the cur­rent glut of used im­ports is hav­ing an ad­verse im­pact on new cars — they are ap­par­ently los­ing value quickly. The chief ex­ec­u­tive of the MIA re­cently said that the cost new ve­hi­cles has never been cheaper — in­ter­est­ing in it­self, when an­other player is about to en­ter the car mar­ket, and claims that, later this year, it will be able to of­fer sav­ings of up to $10,000 on new Toy­otas, Hon­das, and Maz­das.

My im­me­di­ate re­ac­tion is, Hang on a minute; I thought that new­car sellers tra­di­tion­ally claimed that the mark-ups on new cars were min­i­mal. If this new player is on the level, how can it slash up to $10,000 off the price and still make a profit?

Spe­cial In­ter­est Ve­hi­cles

The other fac­tor af­fect­ing ve­hi­cle av­er­age ages is, of course, the con­tin­ued im­por­ta­tion of clas­sic Amer­i­can cars — and even Spe­cial In­ter­est Ve­hi­cles (SIVS). This is go­ing to in­flu­ence the av­er­age be­cause, in the main, clas­sic US cars are more than 20 years old any­way, with many peo­ple us­ing a favourable ex­change rate to im­port sev­eral cars with the pur­pose of sell­ing all but one or two of them to off­set the costs of the ones they elect to re­tain. That, of course, is yet an­other rea­son why many im­ports ‘ just need Vin­ing.’

If you Vin/reg­is­ter an im­port and on sell it, the trans­ac­tion gets cap­tured by the data-match­ing pro­gramme of the NZTA/ Min­istry of Busi­ness In­no­va­tion and Em­ploy­ment. You are only al­lowed to im­port three such ve­hi­cles in any 12-month pe­riod. If th­ese im­ports are NOT VINED, then your trans­ac­tion is not picked up.

So I will watch with in­ter­est to see how that new player pans out with its sales of new Toy­otas etc. I will also be watch­ing for yet more at­tempts by vested-in­ter­est groups to lobby the govern­ment to re­move yet more old cars from the roads. The new ACC levies for some older — al­beit much safer cars — are a prime ex­am­ple. The rea­son many older cars have no safety rat­ing is sim­ply be­cause they have not been in­volved in enough se­ri­ous ac­ci­dents to fea­ture in the re­search data! If you don’t be­lieve me, then why is it that over 80 per cent of the ve­hi­cles that are writ­ten off each year — or that have their reg­is­tra­tions can­celled — are less than 10 years old? Maybe we should be look­ing at the driv­ers, not the cars!

Newspapers in English

Newspapers from Australia

© PressReader. All rights reserved.