Dealing with depreciation

The depressing thing about buying a new car is depreciation. We all know that the moment a new car is driven out of a dealer’s yard it begins to drop in value.

Unless you somehow pick a future classic, the chances are that your car will keep depreciating until it is worth next to nothing. Although cars depreciate at different rates, the general rule-of-thumb is that in the first 3 years your car will depreciate around 13-15%.  After that time the depreciation slows to around 6-9%.

But there are a few simple ways to reduce your depreciation costs right from the word go.

The most obvious is to buy a second hand car, since it will lose value at a slower rate than a new car. Look for a second hand car with its warranty still valid and you'll be off to a good start.

Buying older or run-out models, demo models or leftover stock at end of year sales can get you a nice discount - even though it won't stop the depreciation, it will bring the starting value down so that the depreciation cost is not as high.

It's definitely worth remembering that some cars hold their value better than others. Look for a quality model from a respected brand - cars with good reputations have generally earned them. Cars that are known for being reliable and well-manufactured tend to depreciate at a lower rate.

Don't discount the effects of depreciation - it's your hard earned money, so spend it wisely!

Do Australian Governments prefer imported vehicles?

Last week it was reported that Australian federal, state and local governments are choosing imported automobiles for their fleets rather than Australian-made Holden, Ford or Toyota cars.

According to reports, only around 16% of local council vehicles were manufactured domestically. It was also mentioned that only one in five cars in the Tasmanian government's fleet is Australian-made.

In the Herald Sun today, Paul Bastian of the Australian Manufacturing Workers Union wrote that it was wrong to blame the high Australian dollar for the recent troubles in the Australian car manufacturing industry.

He said the industry could be helped enormously if the government simply bought Australian made cars.

“If governments show leadership and buy Australian-made vehicles for their fleets, they can encourage private fleets to purchase Australian,” Bastian said.

“If all levels of government and private fleets purchased Australian-made cars, sales would increase by around 450,000 per year.”

Maybe the answer to saving the Australian car manufacturing industry is to simply encourage governments to buy their fleets from local Holden, Ford or Toyota.

Let's hope that the report is a bit of a wake up call to both local and federal governments and that they begin to show some pride in our great Aussie cars!

Great Wall and Chery cars recalled due to asbestos!

Ateco Automotive have recalled almost 25,000 Australian-delivered Great Wall and Chery vehicles, after the discovery of the deadly substance asbestos in the engine and exhaust systems.
Ateco today claimed that handling or removing the asbestos affected components "constitutes a very low health risk". They admit that asbestos was used in the production of models from both brands.

Owners will rightly be wondering how such a situation could have arisen, and how the use of components that contain even the smallest traces of asbestos has slipped through to the Australian market.

The asbestos was discovered during routine spare parts tests by Customs and Border Protection officers a few months ago.

The ACCC is monitoring the recall, which will remove the asbestos components from affected models.

The affected Great Wall models include 21,500 utes and SUVs. The affected Chery models include 1700 J11 SUVs and 550 J3 light cars.

Great Wall X240

Recently delivered cars and the existing Chery J1 are free of asbestos and not included in the recall, according to the ACCC.

"We'll be writing to all owners very soon to explain the situation for their specific vehicle," said Ateco Automotive's Daniel Cotterill. "Included in that information will be a risk assessment done by an independent occupational health and safety consultant that outlines the risk to drivers and passengers from the asbestos in these gaskets as being negligible."

The report also notes that the danger to mechanics removing and replacing the components is minimal “even if [the work is] carried out in an uncontrolled way".

This is a terrible situation for the owners of these cars and the mechanics who have worked on them and it raises a lot of questions - particularly about the conditions of the factories where the cars were built and the health of the factory workers who handled these components.

Owners of affected Great Wall and Chery vehicles will be asked to return the vehicle to their dealership via a letter that they should receive this week.

Free driving lessons for L-Platers

Tasmanian learner drivers are being encouraged to take part in the federally funded keys2drive program, a national driver safety campaign aimed at reducing the number of car accidents involving young drivers.

Road safety is such an important issue here in Tassie. If you're a parent of a learner driver you should really get involved with the program and get your kids off to the right start.

The program offers learner drivers a free lesson with a specially accredited instructor.

Soon there will be over 60 driving instructors in Tasmania who  have completed an accreditation course for the program. The program was trialled in Tasmania before being rolled out nationally in late 2008.

"Research has shown that learner drivers are some of the safest drivers on the road while they've got their L plates up," RACT accredited driver trainer Trevor Lewis said. "But the moment they've got their Ps, their risk of serious injury and death jumps dramatically. We're trying to teach them to think about being P-plate drivers while they're on their L plates."

At around $55 an hour, driving lessons are not cheap and so the free lessons have proven very popular. More than 107,000 learner drivers around Australia taking part in the program so far.

Keys2drive is the largest national learner-driver safety program ever undertaken in Australia and it's great to see that young drivers are taking part and improving their driving skills right at the outset.

For more details visit the website www.keys2drive.com.au