Federal Government May Introduce Price Controls For Resale of New Cars

Otago Daily Times, Issue 27092, 28 May 1949, Page 7

Federal Government May Introduce Price Controls For Resale of New Cars

From C. R. Mentiplay, NZPA Special Correspondent

Rev. 8.30 p.m. SYDNEY, May 27. “Racketeering” in resale prices of late-model motor cars has become so serious throughout Australia that the Federal and State Governments are contemplating the introduction of legislation similar to that recently brought into force in New Zealand At present there is nothing to prevent the unscrupulous private citizen who has some priority with a motor firm from obtaining a new car and then selling it within a few days for a profit. Many instances have occurred in which individuals have profited to the extent of £SOO or more on each sale Professional men who can command priorities according to the rules laid down by individual motor companies, can order cars from any of half a dozen dealers and can secure a position in the “ queue ” by paying a small deposit. Usually the buyer will cancel the order and secure the return of his deposit as soon as one firm delivers him a car, but some people have discovered an easy way or making money without effort. Each car is promptly resold at a handsome profit as it becomes available. As things stand in Australia to-day this does not effect the priority o< the buyer with other companies. All is strictly legal, and resales are ad vertised at inflated values in the daily newspapers. This position nas come about through the piece-meal lifting of the tight and comprehensive series of price

controls which have operated since early in the war to limit sales of every type of new and used car or truck. Used cars were released first, and the controls were removed this month from the sales of new cars. Firms selling new cars, however, have adhered to fixed prices, or have made small increases. To-day, some cars are available within a few weens of ordering, but the great majority cannot be delivered for periods up to 18 months, and large American vehicles are imported only under a heavy quota system. The removal of controls has brought into the open a traffic which has existed for the past five years or more on a black market basis. “At least the public knows what is going on now,” said one car dealer. “We have been against it all along, but we can do little to suppress it. After all, if citizens are prepared to scramble for a car worth £7OO when it is offered at £ISOO nothing we can do will help the position.” Meanwhile, Mr F. J. Finnan, the New South Wales Prices Minister, is drafting legislation for submission to the Prices Ministers of other States in an endeavour to prevent inflation of car values. Reputable car firms are finding their own solution by demanding bonds of £2OO on the part of buyers covering a guarantee that they will not resell the car within 12 months. Other firms have employed private detectives to comb the used-car showrooms and obtain evidence of unfair profits which will be submitted to the authorities.