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Let the online bargain hunt begin, properly

Published in The Daily Telegraph (Sydney), 15 December 2011
http://www.dailytelegraph.com.au/news/opinion/let-the-online-bargain-hunt-begin-properly/story-e6frezz0-1226222232424

Thanks to the high dollar, Australians have become the world’s most savvy online bargain hunters. Parcels with cheaper DVDs from the US, computer games from Hong Kong and books from Britain arrive on our shores in their thousands every day.

Australian buyers know how much they can save by shunning domestic retailers for overseas competitors. Little wonder when, say, Steve Jobs’ biography is selling for $44 in Australia and just $18 in Britain. Some British online retailers even offer free worldwide shipping.

What most Australians are probably unaware of is how much more they could save if it was possible to buy other goods internationally. Cars for example.

Of course, shipping a car around the world is more expensive than getting a book or a perfume delivered from overseas. Then again, the price differences between cars sold in Australia and elsewhere have become so enormous it may still be worth it.

The shipping rate for an ordinary sedan from Southampton to Sydney is roughly $1500. But that is just a fraction of the price difference.

A good way to compare car prices internationally is to look at the used car market. It is a widespread marketing practice in many countries to advertise unrealistic prices for new cars, which then get heavily discounted on sale. Such behaviour is less common in the second-hand car market, so international price comparisons may yield a more realistic picture.

Take a two-year-old Toyota Prius. In Australia you would pay $26,000 for this car. The same car would only set you back around $21,300 in the UK. Even allowing for shipping you could save more than $3200.

About to rush to the nearest computer to order your next car from the other side of the world? Don’t.

The government has made it virtually impossible. In order to privately import a used car from abroad Australians first need to live abroad and own and use the car for a full year before they can apply for a Vehicle Import Approval from the Department of Transport.

Of course, there is no shortage of reasons why the government would wish to make it difficult for private buyers to import cars. They may want to protect the Australian car industry from extra competition.

But, seriously, the local industry is receiving billions of dollars of taxpayer assistance. Why should it be wrapped in more cotton wool to shield it from more efficient overseas competitors?

Cars are one of the best examples where supposedly well-intentioned government intervention is hurting consumers. Shoppers want a good deal. It’s time the government got out of their way.

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