Why are cars so expensive in Australia

When it comes to buying a car, the price can vary significantly depending on where you are in the world. While some countries have affordable options, others struggle with expensive prices that make owning a vehicle seem like an unattainable dream. Australia is one such country where cars are notoriously expensive, and many factors contribute to this issue. In this article, we will delve into the reasons behind Australia’s expensive car prices and the impact it has on its residents.

High Import Taxes

One of the main reasons why cars are so expensive in Australia is due to high import taxes. The Australian government imposes a 5% tariff on imported cars, which adds up significantly when compared to countries with little or no import tax. Additionally, luxury cars are subject to an additional 33% tax, making them even more expensive. This high import tax is meant to protect the local car manufacturing industry, but it also limits competition and drives up prices for consumers.

Limited Market Competition

Another factor driving up car prices in Australia is the lack of market competition. The country has a small population compared to other developed nations, which makes it unattractive for car manufacturers to set up operations. As a result, there are fewer options for consumers to choose from, and the limited competition allows car dealerships to charge higher prices.

High Cost of Living

The cost of living in Australia is also significantly higher than other countries, making it more expensive to own a car. This includes expenses such as registration, insurance, and maintenance costs. The high cost of living also affects wages and salaries, making it more challenging for people to afford a car in the first place.

Sell Your Car

If you’re looking to sell car in Melbourne, you may have a difficult time finding a buyer due to the high prices of vehicles. However, there are options available such as online platforms and car dealerships that can help you find a buyer. Keep in mind that selling your car may not yield the same amount of profit as it would in other countries due to Australia’s expensive car market.

Scrap Yards

When cars reach the end of their life, they often end up at scrap yards where they are dismantled for parts or recycled. In Australia, scrap yards also face the issue of high car prices. This means that even old and damaged cars will have a higher value, making it difficult for scrap yards in Melbourne to purchase and resell parts at reasonable prices.


In conclusion, there are various factors contributing to the expensive car market in Australia, including high import taxes, limited market competition, and the overall high cost of living. As a result, buying and owning a car in Australia can be a significant financial burden for its residents. However, there are options available such as selling your car or visiting scrap yards that can help alleviate some of the costs. Despite these challenges, Australians continue to find ways to own and maintain their vehicles, showing their love for cars even in the face of high prices.