GST & used car prices

Q.I've seen a few used car adverts lately saying the usual "beat the GST" message, but I could swear that all the price guides and such *predict* that used car prices will go down, following suit of the drop in tax on new cars. I was at a car yard the other day, and the salesman said that prices will actually go up after the GST. His reasoning was as follows (and I've seen printed in an advert too): A car that costs $20,000 now may drop, say, its market value to $19,000 after July 1. Now add in stamp duty (some say abolished, some say not??), Gov. statutory charges and car now costs (approx $1200) $20,200. Now on top of that price, you pay a 10% GST so the total + $2,020 = $23,220. Therefore for an advertised $20,000 car: Before July 1: $21,200 After GST: $23,220 I dunno who to believe and its quite a major difference in price. I am very near to purchasing a car that should be in the $18,000 price range, and I can probably buy before the GST but don't won't to feel rushed to buy before doomsday (July 1). Is there somewhere I can find the facts? Half the used car yards advertise the "beat the GST" crap, others don't make a mention... As far as I know, RACV and such predict used car prices to fall. It's as confusing as hell - could it be that no one knows? I'd like to hear people's thoughts on the impending GST and it's effects on specifically used car prices.

A.Used cars sold at a dealer will attract GST. Used cars sold by private seller will not attract GST. Now there are two market forces here at work, used car prices will rise if sold at dealer so private sellers will think they can get about as much as a dealer lets say. Driving up used car prices. Then at to that, new car prices will drop thus reducing the value of second hand cars. Then add abit of confusion into the market and dealers will be giving lower trade-ins on used cars because 1) the market hasn't settled so they will go the safe option and give you crap all for your trading 2) lower trade-ins cos they gota compete with non-GST private sellers 3) cos they can and you cant do much about it. Now lets put plusses and minuses to the used car price now Used car +(used cars at dealer rise)-(private sellers no GST)+(greedy sellers trying to get dealer prices on private cars)-(drop in tradins)-(lower new car prices) Net effect prices falling. The thing is that used car prices are depressed at the moment. But if dealers & private sellers base there prices on current prices and factor in a drop later then the drop will be rather large. Basically its a toss of a coin about used cars. I don't think you can predict these kinds of things and you cant use other countries as examples due to certain factors the government has added.

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