Advertised prices are set to jump by an average of $8000 by the end of the month, as car companies are forced to commit to a minimum all-in national price for the first time.
The driveaway deals on bargain cars such as the Hyundai Getz will not change, but the advertised prices of the value-driven contenders around the $19,990 price point will jump by around $4000 and it will be more for popular family cars including the Holden Commodore and Ford Falcon. Luxury cars, which are rarely advertised with a price, could still appear more than $25,000 more expensive.
The reason for the apparent increases is that all advertised prices from May 25 will have to include on-road costs - delivery, dealer preparation, stamp duty, registration and compulsory insurance - under new regulations which will be enforced by the Australian Competition and Consumer Commission. Cars are not the only commodity affected by the change, which is also expected to have a significant impact in the travel sector.
Used cars are not affected and neither are established houses.
But car companies are struggling to adjust and some believe the 'clarity pricing' will affect their ability to deal, since it is sets a minimum price level.
"It could be seen as price fixing. If the car companies decided to make one price apply across the board, the ACCC could come to us and accuse us of price fixing," the spokesman for Mercedes-Benz Australia, David McCarthy, said yesterday.
"It limits the flexibility in the sale by the dealer, creates a situation where car prices will vary - sometimes by thousands of dollars - between states and will further disadvantage dealers in some areas, and it makes it very difficult for the dealer to adjust pricing to make a sale."
Most brands are avoiding conflict on the price position while getting their lawyers to investigate the requirements under the ACCC's enforcement policy.
But the peak body for the motor industry, the Federal Chamber of Automotive Industries, is concerned the ACCC may have "picked up the ball and run out of the stadium".
"One of the consequences might be, not only to make the price transparent, but invisible," says the chief executive of the FCAI, Andrew McKellar.
The FCAI is also worried consumers might lose out.
"Does the price mean you cannot negotiate below that? They have left us with some quite difficult loose ends. There has now got to be a bit of fancy footwork to resolve the issues, as best we can, in the final run-in or as quickly as possible after that."