Why are NZ cars so expensive?
Discussion
Or maybe I should ask why US cars are so cheap. Obviously the strong NZ dollar makes NZ prices look larger than they have been in the past, but that can't be the whole story. And how much tax is built in to the price?
Anyways, I was doing some comparisons, and found the following comparable cars and their prices:
Ford Focus 2L 5 door
$NZ price: $32,490
Converted to US dollars: $22,970
US cost (without tax): $14,615
Converted to $NZ $20,651.00
Thats a NZ$12k difference
VW Passat V6 4-Motion
$NZ price: $65,490
Converted to US dollars: $46,301
US cost (without tax): $27,205
Converted to $NZ $38,440.67
Thats a NZ$11k difference
VW Touareg V8
$NZ price: $129,900
Converted to US dollars: $91,839
US cost (without tax): $44,915
Converted to $NZ $63,464.90
Thats a whopping NZ$66k difference
Porsche 911 (997) Carrera 2
$NZ price: $200,000
Converted to US dollars: $141,400
US cost (without tax): $69,300
Converted to $NZ $97,920.90
Thats an even more whopping NZ$103k difference
So what gives? It looks like cars over a certain price ($100k?) are taxed even more?
Its all especially odd when you consider what cheap and good cars you can get on the used market.
Anyways, I was doing some comparisons, and found the following comparable cars and their prices:
Ford Focus 2L 5 door
$NZ price: $32,490
Converted to US dollars: $22,970
US cost (without tax): $14,615
Converted to $NZ $20,651.00
Thats a NZ$12k difference
VW Passat V6 4-Motion
$NZ price: $65,490
Converted to US dollars: $46,301
US cost (without tax): $27,205
Converted to $NZ $38,440.67
Thats a NZ$11k difference
VW Touareg V8
$NZ price: $129,900
Converted to US dollars: $91,839
US cost (without tax): $44,915
Converted to $NZ $63,464.90
Thats a whopping NZ$66k difference
Porsche 911 (997) Carrera 2
$NZ price: $200,000
Converted to US dollars: $141,400
US cost (without tax): $69,300
Converted to $NZ $97,920.90
Thats an even more whopping NZ$103k difference
So what gives? It looks like cars over a certain price ($100k?) are taxed even more?
Its all especially odd when you consider what cheap and good cars you can get on the used market.
If you're assuming a "Cost Plus" paradigm then you could start with :
- Shipping
- Grab, Snatch & Take
- A smaller market with proportionately larger overheads etc etc
and work your way up . . .
On the other hand you could observe a "Supply & Demand / Market" paradigm.
If you assume that (particularly for higher spec cars) a vendor is happy with a small volume turnover, with a high margin AND a small number of purchasers are prepared to pay that price . . . then you have your answer.
On the other hand (we're now up to three) you could forget all that b
ks and import something yourself 
- Shipping
- Grab, Snatch & Take
- A smaller market with proportionately larger overheads etc etc
and work your way up . . .
On the other hand you could observe a "Supply & Demand / Market" paradigm.
If you assume that (particularly for higher spec cars) a vendor is happy with a small volume turnover, with a high margin AND a small number of purchasers are prepared to pay that price . . . then you have your answer.
On the other hand (we're now up to three) you could forget all that b
ks and import something yourself I think you need to add the taxes before you can do the full comparison.
Also, those are for LHD prices, RHD for most of these vehicles are more expensive due to smaller numbers.
Having said this, yes you do get ripped-off in NZ.
It's traditional and you see it throughout NZ retail. In the past they've been able to get away with it because your average Joe didn't have the connections or the knowledge to import items (be it cars, stereos or ride-on lawn mowers) himself. Now with the internet more and more people are saying, 'Hold on, I can get this for half the price in the USA', hence the number of 'parallel-imported' companies springing-up.
Eventually we'll all stand up and say enough is enough and we'll get a fair deal. One day we may even get free banking but that could be pie-in-the-sky daydreaming!
Also, those are for LHD prices, RHD for most of these vehicles are more expensive due to smaller numbers.
Having said this, yes you do get ripped-off in NZ.
It's traditional and you see it throughout NZ retail. In the past they've been able to get away with it because your average Joe didn't have the connections or the knowledge to import items (be it cars, stereos or ride-on lawn mowers) himself. Now with the internet more and more people are saying, 'Hold on, I can get this for half the price in the USA', hence the number of 'parallel-imported' companies springing-up.
Eventually we'll all stand up and say enough is enough and we'll get a fair deal. One day we may even get free banking but that could be pie-in-the-sky daydreaming!
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