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Two-tier market hurts vehicle values: MTA

NZN 7/02/2017 Jonathan Underhill

New Zealand has been ranked worst in a global survey for depreciation in cars, with a 54 per cent slump in value after just 56,000 kilometres beating the UK and the US.

The survey by Carspring, an online vehicle trading site based in the UK, shows that not only do cars lose their value fastest in New Zealand but the country ranks well down the field in terms of the affordability of used cars, at 19th.

The US is the cheapest place to buy a used car followed by the UK and Russia, while Singapore ranks as the most expensive.

But the national body of car dealers, the Motor Trade Association, says factors that affect New Zealand car values include the large volumes of used imports on the market and the tendency for new vehicles to sell below their list price.

"New Zealand is somewhat unique amongst developed markets in that we have a two-tiered market structure with new vehicles entering our fleet, as well as used imports," said MTA's Tony Everett.

"Used imports now make up the larger share of our national fleet. Used imports can be accessed and shipped to NZ and still be a marketable proposition - in effect they are already heavily discounted at their source".

If cars are a dud investment in terms of capital gain in New Zealand, that hasn't deterred Kiwis from buying. New Zealand new vehicle sales hit a record in January, signalling no imminent slowdown from three straight years of record sales.

Mr Everett said assessing depreciation could be problematic in New Zealand because sales of new vehicles were often well below the so-called "list price".

"The majority of new vehicles sold in New Zealand are to business and fleet buyers, so discounts can be significant."

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