It's official: ACCC exempts media from price rules
BY JOHN MELLOR | 5th Jun 2009
In a letter to GoAuto from Lin Enright, of the ACCC media unit, in reply to a long series of questions put to the ACCC last week, the ACCC says it has resolved that price “representations made to journalists or third party data providers” under the amendments to the Trade Practices Act made last September “are not subject to the requirements” of the Act.
This means it is not illegal for an employee of a car company to supply to the media and to price guides (such as Glass’s Guide and Red Book) prices that do not include all on-road costs as was feared from the initial reading of the ACCC guidelines for the car industry.
Ms Enright also said: “Similarly, price representations made by those bodies (ie the media and price guides) are not, themselves, subject to the requirements.” In other words the media and price guides are not caught by the new regulations because they do not actually supply vehicles for sale and can continue to publish prices that do not include statutory and delivery charges.
Industry sources tell GoAuto that rather than referring to these prices as recommended retail prices as before, they will most likely be referred to as “manufacturers’ list prices”.
But the problem of having to publish the full final price on car company web sites continues to haunt the car-makers and car importers because they are suppliers of cars and caught by the new rules.
Car-makers may have to create price calculators that factor in all the myriad third-party insurance, stamp duty and registration variables so that visitors to their web sites can get some idea of the final on-road costs before visiting dealerships.
Dealers face less complexity in publishing final prices on their web sites because they know pretty accurately the additional statutory charges that apply in their area.
But the issue has raised the question of what constitutes the price of the car at the time of purchase and what constitutes running costs? Some lawyers advising car-makers argue that compulsory third-party insurance and registration fees are part of the running costs for the first year on the road and should not be included in the purchase price quoted by car companies and dealers.
It is also focusing attention on "illegal" stamp duties on the car price levied by state governments – a costly impost on car buyers that was supposed to have been replaced by the GST. There is argument mounting that given the federal government's undertaking to Australians that the tax would replace all state duties and stamp taxes, are they legally able to continue to do so nine years later and can they be forced to stop.
That will surely be on Ken Henry's review of taxation so maybe the simplification of car prices even at dealership level is at hand.
Read more:
Questions for Graeme Samuel on national car pricingChaos rules in car price advertising
Alarm bells on new advertising rules