GST to reduce running costs, says NRMA

THE anticipated six per cent drop in new car prices once the GST takes effect will be accompanied by a four per cent reduction in running costs, according to the NRMA.

A study carried out by the motoring organisation indicates the cost of running a Holden Commodore Executive - travelling an average of 15,000km annually over five years - will drop from $172.43 per week to $165.43 per week.

The study takes into account typical running costs such as depreciation, insurance, registration, fuel and NRMA membership fees.

The post-GST saving amounts to about $364 per year.

NRMA Automotive Technical Services Manager Mr John Ward said that while insurance, CTP and membership would attract a GST, registration of a vehicle will not.

Mr Ward suggests, based on Federal Government assurances, there will be no net increase to fuel costs other than normal price fluctuations.

"Costs of servicing and repairs will change after the introduction of the GST," he said.

"The cost of parts will drop with the abolition of the 22 per cent sales tax, while the cost of labour will increase." Full details of vehicle operating costs and the impact of GST will be available at the end of June when NRMA launches its annual Vehicle Operating Costs booklet.