You may be able to negotiate the price of big-ticket items down, such as that enormous television, but the law states that retailers must include the cost of the goods and services tax (GST) in any advertised price.
Advertised car prices, on the other hand, don’t always display the full purchase price. While car prices include GST and luxury car tax, if it’s applicable, they often omit a bunch of on-road charges, the most common being stamp duty, registration, compulsory third-party (CTP) insurance and dealer delivery charges.
The first three are either levied by or required by various governments and are pretty much unavoidable.
State governments charge stamp duty, and each state and territory (except Tasmania) has an online motor vehicle stamp duty calculator.
Rates for stamp duty vary by jurisdiction, and some offer reduced rates for fuel-efficient or hybrid vehicles.
Stamp duty is determined by the value of a car, so if you decide to jump up from, say, an entry-level variant to a mid-tier model, you’ll pay more stamp duty. Similarly, if you add options to your new vehicle, such as up-sized alloy wheels or a body kit, you’ll also pay more in the way of stamp duty.
Registration is payable to your state’s motor authority, and means that your new ride will be road legal for the first year. Thereafter it’s usually a flat annual fee, although there are concessional rates for retirees and other special cases.
Compulsory third-party insurance, as its name implies, is a legal requirement for all registered vehicles and covers the cost of personal injury or death wrought on third parties should your vehicle be deemed to be at fault in an accident. If you want coverage for yourself or for property damage, separate insurance will need to be purchased.
In New South Wales, the ACT and Queensland, CTP must be purchased from a private insurer. In other states, though, CTP is provided by the state and its price is included in a car’s registration fee.
Dealer delivery charges are meant to cover all the things that people at the dealership need to do before a car can be driven off the lot. These include removing all of the protective tape used during a vehicle’s transportation, filling out paperwork, giving it a wash and a scrub, and affixing the number plates.
Out of all the on-road costs, dealer delivery is the only component that can be negotiated on. How much you can reduce dealer’s charges by depends on any number of factors, including the popularity of the model, how a salesperson is tracking with their sales targets, and the negotiation skills of everyone involved.
If a dealer or manufacturer advertises a car with a ‘driveaway price’, this means that the number includes all on-road costs. On this website, unless we explicitly state otherwise, we refer to the manufacturer’s list price, which includes GST and luxury car tax, but not on-road costs.
Richard Kew, director of Platinum Direct Finance, says that whenever anyone heads into a car showroom with the intention to buy, they must negotiate on the total price of the car, inclusive of all these on-road costs.
If you negotiate on solely on the list price of the car, you could be in a very nasty surprise when you actually purchase the vehicle.