CAR rental firms and fleet managers are starting to purchase and licence vehicles in Queensland and Victoria to avoid high taxes in Western Australia.
The manager of a big car rental firm in Perth, who did not want to be named, told WA Business News the high stamp duty rates in WA made it more attractive to licence vehicles in other States.
Local car dealers say they have seen the first examples of big orders being placed in other States, especially Queensland.
Car buyers could save about $800 per vehicle if they ordered Falcons or other common mid-priced cars through their Queensland office.
The savings run into the thousands of dollars for more expensive models.
The cost difference reflects the higher stamp duty rates in WA.
For vehicles costing more than $40,000, stamp duty in WA is levied at the rate of 6.5 per cent compared with just 2 per cent in Queensland.
Registration and compulsory third party insurance levies are slightly lower in WA but this is not sufficient to offset the stamp duty difference.
Mark Lauren, general manager of the Stan Perron-owned Toyota WA Distributor, is concerned about the emerging trend.
“I had a major rental car company telling me last week they would buy interstate,” he said.
Mr Lauren said the company previously would always have purchased its cars in WA.
“Its starting to have an effect on some of the huge investment that our dealer franchisees have in this State,” he said.
“We’re talking hundreds of motor cars over a year that we could be losing out of this State, just from that one customer.”
Chamber of Automotive Industries WA president Phil Noble said he had also seen examples of WA fleet managers buying interstate.
“People are doing this, its starting to happen,” he said.
“I’ve seen it happen in the eastern States for the sake of $300. We’re talking here about seven or eight hundred dollars.”
The cost of transporting vehicles across the Nullabor will impose a limit on the number and type of vehicles purchased interstate.
For budget priced cars, the cost of transport would more than outweigh the extra stamp duty payable in WA.
However, for mid-priced vehicles, the $800 cost impost in WA is enough to prompt a close look at placing orders in other States.
And, for more expensive vehicles, such as a $44,000 model, the cost of licencing a new vehicle in WA is $3,350, more than double the amount payable in Queensland.
Motor Trade Association of WA executive director Peter Fitzpatrick said national rental and fleet firms had the capacity to pick and choose the State they licenced their vehicles in.
He said manufacturers’ demonstration vehicles in WA were nearly all registered in other States.
“I am also hearing anecdotal evidence of dealers in more expensive marques looking to buy in Queensland,” Mr Fitzpatrick said.
He said the emerging trend was damaging the local industry, especially as fleet customers provided a large share of new car sales for many dealers.
“The Government has put that business at risk because of an uncompetitive level of stamp duty,” Mr Fitzpatrick said.
“The mistake the Government made was that cars are not like houses, they can move from State to State.”
Mr Fitzpatrick said the higher stamp duty in WA could be counter productive for the Government, as it would not achieve the expected growth in revenue.
Not all rental firms are looking to buy interstate.
John Busby, state manager of car rental firm Budget, said his firm had not considered the possibility of buying interstate.
He said there was minimal interstate movement of Budget’s fleet.
A spokeswoman for Hertz echoed this view, saying the company’s entire WA fleet was registered in this State.
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