A.A. seeks end to car-purchase laws

Press, 10 February 1982, Page 6

A.A. seeks end to car-purchase laws

PA .. Wellington The Automobile Association told the Industries Development Commission hearing into the motor industry yesterday that hire-purchase regulations on cars should be scrapped. The iecrvtarv-general of the New Zealand A.A.. Mr Bab- Lithgow, said that car sellers Avere getting around the hire-purchase laws and this avbidance was costing the purchasers more in the end. ? He said sellers wpre offering mortgages on homes - some of which were not being registered with the Land Registry Office - to gel around the regulations covering deposit and repayment. • - Mr Lithgow said one of the main vehicles for this avoidance was regularly ' advertised by car dealers and offered five years to pay. In written submissions the A.A. said that on an average advance of $5351 it was costing a purchaser $160.53

more to avoid the regulations over three years. Over five years, the avoidance would cost $267.55 more than if the deal had been, made within the regulations. . Mr Lithgow said yesterday that the A.A. had submitted to the Government that hire purchase regulations should be scrapped and decisions on deposit and terms of a loan should be left to the experience of those in the finance industry who could assess the abjlity of people to pay. He said that, the A.A. felt strongly abobt the increase in price of new cars but did not see that there was much it could do.aboul it. He said Government taxes were the main factor in the • high price of New Zealand cars, but that w;|th present calls for lowering the per-' sonal taxation burden. reduc-< tion in indirect taxes on cars ’ would be unpalatable. Mr Lithgow strongly ' criticised the Government’s

. decision to import the South Korean Pony cars.. He said the cars had been brought in with an eye to our trade imbalance rather than for the good of the motor industry. "1 think the Government s decision to bring in any car ■ should be examined from the point of servicing and parts for the life of a vehicle rather than just for the trade ; with a country like Korea," he said. "When some people are asking for a major reduction in makes and models, it seems to be flying in the face of this." The regulations were forcing people to keep cars when they wanted to upgrade to newer and more- fueLefficient models, he said. Because of the present severe restrictions — a 60 per cent deposit and repayment in 12 months for new ’cars and 18 months for second-hand vehicles — people were left with little alternative but to finance a car outside the regulations. Mr Lithgow said.