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How to make the most of new car deals before Yen-driven price rises

How to beat new-car prices rises in June, the biggest month of the year for vehicle sales

New-car buyers are scrambling to beat currency-driven price rises in what is expected to become the biggest sales month in Australian automotive history.

June is always huge as dealers push hard to close off the financial year on a high, but a perfect storm is brewing to make this month even bigger.

The value of the Australian dollar versus the Japanese Yen has fallen by almost 20 per cent over the past 12 months and the big brands are struggling to contain prices.

Cars that were imported under more favourable exchange rates are starting to run out, and fresh metal imported at higher prices are beginning to arrive.

Japan is the single biggest source of motor vehicles in Australia, representing one in every three cars imported.

It’s also where our top selling cars - the Toyota Corolla and Mazda3 - are made.

New-car prices have been at 37-year lows for the past four years.

But having led the car market for the past five years between them, our two most popular cars are under attack.

The Hyundai i30 beat the Toyota Corolla and Mazda3 to the top sales spot for the past three months because the Japanese pair couldn’t discount as heavily as the South Korean brand.

The exchange rates with our other primary sources of motor vehicles - Thailand and South Korea - have remained stable while the Australian dollar has taken a dive to the Japanese Yen.

The Hyundai i30 automatic is currently on sale for $19,990 drive-away no more to pay - a saving of about $7000 - but the cheapest Toyota Corolla automatic deal currently on offer is $22,990 drive-away, about $3000 off the RRP.

Mazda isn’t even publishing a drive-away price for the Mazda3, instead preferring to list “free on-roads”. Contrary to perception, this is not a drive-away price, it only covers registration and stamp duty.

Mazda showrooms are using a “dealer delivery fee” to add $1500 to $2500 to the price in an attempt to recoup some profit into each Mazda3 deal.

Even the aging Mitsubishi Lancer, now at $20,990 drive-away as the model nears the end of its life cycle, can’t limbo as low as the Hyundai i30.

Meanwhile the RRPs of our cheapest hatchbacks are starting to creep up even though they are made in Thailand - because the local subsidiaries often pay their Japanese head office in Yen or Aussie dollars rather than Thai Baht.

For example, the Mazda2 hatchback now starts from $16,990 drive-away; a year ago it was $1000 cheaper.

A Honda Jazz automatic is now $19,665 drive-away - almost as much as a car in the next class size up - also $1000 more than the same time last year.

The competition is so tough, US car giant Ford has walked away from the small-car price war. The Ford Focus range now starts at $27,234 drive-away - not $21,990 as it was a year ago.

There are still deals to be had, if you know where to look. In some cases, buyers can grab stock that’s about to be discontinued.

Nissan is about to stop selling the Micra and Pulsar hatchbacks because it couldn’t compete on price - and is quitting them from $12,990 drive-away and $18,9990 drive-away respectively.

“Once the Japanese start increasing prices, that will allow other brands to slowly creep up to match them,” said one senior car industry executive, who asked not to be named.

“That’s why the movement of the Japanese Yen to the Australian dollar will, over time, affect every brand, not just the Japanese.”

New-car prices have been at 37-year lows for the past four years, according to analysis by Commsec.

Many small cars released over the past three years - such as the Toyota Corolla and Nissan Pulsar - matched their RRPs from 20 years ago, despite being more advanced and better equipped.

But those days appear to be coming to an end, say industry insiders.

“The Japanese brands have had a free pass for three years and squeezed everyone else to new lows,” said the senior company executive. “Now their prices are coming back to reality. And that means prices will rise.”

Are you in the market for a Japanese car at bargain prices? Let us know in the comments below.