CARR Title

NEW CAR RIPOFF

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BLATANT HIGHWAY ROBBERY

Buying a new car in Australia is like walking through a minefield. Car dealers employ every sales trick in the world to hook buyers. They use psychological pressure and even emotional blackmail to get people to sign those purchase contracts at the best possible terms - for the dealers, that is.

The important thing for all new car buyers to understand is that the standard new car purchase agreement is skewed almost completely towards the car dealer. There are all sorts of clauses that allow a dealer to not refund a deposit. On top of that, I have seen a purchase agreement that has a clause stating that if the price of the car goes up, even after the agreement has been signed and the price firmly arranged, the car dealer can increase the price accordingly. Of course any savvy buyer will cross that clause out and if the dealer doesn't like it, the buyer should just walk right out the door and go elsewhere.

BUYING A NEW CAR

The worst thing that you can do is to walk into the lion's den to negotiate a price. If you walk into the car dealer's showroom, you are at the salesman's mercy. You are not in a position to negotiate better prices with other dealers. You will be the target of very clever psychological salesmanship by experts who know how to close a deal without you even realising how you have been manipulated.

Of course if you don't fall for the salesman's tricks of the trade and look like you are going to walk out, invariably the salesman will offer you a price for the car that sounds attractive and tell you that you will get it only if you sign the sales agreement there on the spot and the deal won't be available afterwards. Do not fall for this crap. If the salesman is willing to sell you the car for that price today, he will certainly sell you the car for the same price tomorrow and maybe even cheaper. The only reason the salesman does this is to stop you walking out and getting a better price from another car dealer.

GETTING THE BEST PRICE FOR A NEW CAR

One of the best ways to get the best price for a new car is to put out a tender. That way, the car salesmen are at your mercy, not the other way around. They have to play your game if they want to make the sale. And if they don't want to play your game, there are plenty of other car dealers that will.

This is how it's done, but you have to have nerves of steel. However, you can often get the best price on a new car this way. To explain, when you walk into the car dealer's showroom, you have no idea what the lowest price for the car is, because only the car salesman knows how low he is prepared to go. So when you haggle a price, you are operating from a position of ignorance and the salesman is holding all the cards. He knows the bottom line and you do not. So he may give you a discount, but it certainly will not be the best price that he would offer if you knew his bottom line. So how do you find that bottom line? Simple. You make all the car dealers compete against each other.

All you have to do these days is to determine the exact make and model of car that you want and all the accessories that you need. Then you go to the Internet and make a database of the email addresses of all the new car dealers selling the make of car that you want. Then you send out a bulk email to all of them, telling them that you are interested in purchasing this car for cash, state the exact make and model and most importantly, list the features that are required, plus list all the accessories you want. You have to state clearly that you want an EMAILED quote, not a phone call from a salesman. Then you sit back and wait for the responses.

Here is a typical email asking for car dealers to tender for the sale of a vehicle. You can use it as a template - just fill in your own specification for the car you want. This is how I purchased my current vehicle.

Dear (insert car dealer name),

I wish to buy the following brand new vehicle as specified: If you offer me the best price for the vehicle as specified, I will contact you and arrange to discuss the purchase further with one of your salesmen. I do not wish to enter any discussions on the telephone. I need your response IN WRITING - an emailed reply will be suitable.

Please understand that I will NOT divulge any prices to you that I have been offered from other dealers, as this would not be ethical.

I look forward to receiving your offer.

Yours sincerely, (insert your name)
THIS IS WHAT WILL HAPPEN

Even though you stated that you did not wish to receive phone calls from salesmen, that is exactly what you will get - phone calls from salesmen. The reason for this is that they want to do to you on the phone what they would do to you at their showroom - talk you into accepting a price and signing a purchase agreement. They will also ask what was the best price that you have been offered for the car. This is where you have to have a will of steel and not succumb to their wiles. This is what you have to tell them.

Once you have done that, say thank you and hang up. DO NOT get into conversations or debates with car salesmen, because they will try and steer you into a deal with them and this is what they are trained to do.

There will be dealers that will not play your game and they will refuse to give you a quote with their lowest price. No problem - simply trash their emails and don't take it any further with them. Then you will be left with a few dealers that have offered you a low figure. Also, you can contact them and see if they will tack your car onto a fleet purchase, which will drop the price of your car even further. When you think you've hit the most rock-bottom price, then you can buy the car.

THE DEALER DELIVERY CHARGE RIPOFF

The biggest ripoff inflicted onto new car buyers is the dealer delivery charge. Why this is even a factor in the price of the car is preposterous in the extreme. Do people play a dealer delivery charge when they go to buy a TV or a lounge suite, even if it is not delivered to their door? Of course not - nobody would stand for it. But car buyers just fork out exorbitant amounts of money to car dealers merely to pick up their cars that are clean and in order - as they should be anyway.

So what exactly is this dealer delivery charge? Very simply, it is the fee that a car dealer will charge for preparing the car for the customer - things like removing the bonnet and boot protection film and washing the car. The dealer may check the oil as well. Of course the car has to be registered in the new owner's name, but this is all done on-line in the matter of minutes and the only effort that the dealer has to make is to pick up the number plates. That's usually all that the dealer does, yet most dealers will charge anywhere from $1500 to a whopping $3000 for this.

Every new car purchaser should confront the car salesman and demand to know exactly what the dealer does to justify charging up to $3000 for preparing the car, something that should be included in the purchase price anyway. So when a car salesman quotes you a price, haggle the best discount, then demand a breakdown of the dealer delivery charge and deduct every cent that is not justified. If the dealer does nothing more than remove protective film, check fluids and wash the car, then $100 is more than enough for this.

OUTRAGEOUS CAR PRICES IN AUSTRALIA

If you were in the USA in 2013 and decided to purchase a new Mercedes Benz C250-CDI sedan, you could shop around, but you would find that you would have no problem buying this car for around US$35,770 according to the Mercedes Benz USA website. Try buying this car here and you will find that you will pay around $75,750, according to the Mercedes Australia website. That car costs more than double the US price in Australia, in fact a whopping 110% more.

The price difference for the same vehicle in the USA as compared to the price in Australia is staggering, especially when at the time those prices were surveyed, the Australian dollar was slightly higher than the US dollar. The cost to freight this car from the Mercedes factory in Stuttgart Germany to the USA would be roughly the same as transporting it to Australia, so this is not really a factor in the price.

The same situation exists for other imported cars, such as Mazda and Toyota. For instance, the top of the line 2013 Mazda 6 Sports Sedan Luxury Touring costs $30,290 according to the Mazda USA website. The same vehicle in Australia costs $51,387 according to the Mazda Australia website. That car costs around 70% more in Australia than it costs in the USA.

LUXURY CAR TAX SCAM

When the GST was introduced in 2000, the federal government promised that all indirect taxes would be removed. Of course like most election promises, this was callously broken and the Australian public found itself paying luxury car tax, fuel excise (a tax by another name), wine equalisation tax, as well as a raft of state taxes that were promised to be abolished. So yet again, Australians found themselves forking out more and more money for items that should have been much cheaper, but for those broken promises.

The luxury car tax is the reason why that Mercedes Benz C250-CDI costs more than double in Australia as it does in the USA. In 2013, this iniquitous tax kicked in at $59,133 and it is applied at 33%. So the luxury car tax on that Mercedes is calculated as follows:

That luxury car tax of $5,484 is applied over and above all the other taxes and levies applied on that vehicle, so there is no wonder that this Mercedes Benz C250-CDI sedan costs more than double in Australia than it does in the USA.

THE POLITICS OF ENVY

So why should people pay a luxury tax in the first place? Why should people who work harder and smarter and earn enough to purchase a Mercedes Benz be punished by being hit by this iniquitous tax? All people in Australia are supposed to be equal, but when it comes to money and taxes, the politics of envy and the idiocy of socialism is applied to rip people off because they are considered to be well-off.

There is absolutely no valid reason why that Mercedes Benz C250-CDI sedan should cost one cent more than in the USA. In fact it should have been slightly cheaper in 2013 because the Australian dollar was higher than the US dollar. But the difference is that the Americans do not suffer under the politics of envy or rampant socialism that attacks anybody who becomes successful and makes good money.

AUSTRALIANS ARE RIPPED OFF YET AGAIN

At the end of the day, one can see that Australians are attacked again by their own government, especially when socialist governments are in power and would like to reduce Australians down to the lowest common denominator. Everybody understands that the government needs revenue to pay for infrastructure and services, but the same situation exists in the USA. So there really is no excuse for Australians to be gouged like this, especially when the luxury car tax was promised to be repealed in 2000.

Unfortunately unlike speed cameras, toll roads and parking fines, Australians cannot avoid paying the ridiculously high taxes that are built into the price of new cars. Sure, it's easy to avoid getting booked for speeding and parking or paying to drive on those mobile parking lots called toll roads, but it is impossible to escape car taxes that are outrageously exorbitant.

I do not have any answers for this, so all we can do is lobby politicians to remove these taxes and allow cars in Australia to be priced around the same as they are in the USA. Of course this will never happen, because politicians will promise everything to get your vote, but deliver nothing when they are elected.