THE GST may not be very popular,
to be happy:

have a good reason

but new car buyers
many !991 model

automobiles are cheaper this year than they were last year
even after the seven per cent Goods and Services tax is

added on.

As you may already be aware,
aufoinobile manufacturers no
longer have to pay 13%: per cent
federal tax on the wholesale value
of each vehicle. Most of them are
passing this saving on to their cus-
tomers.

In a survey of domestic and
import car companies, 1
discovered that at the retail level,
new 1991 model cars are averaging
about 10 or Jf per cent cheaper
than they were in the latter part of
1990,

Even after adding the seven per
cent GST, new automobiles are
still about three to four per cent
cheaper than last year.

Greg
Wilson

AUTOMOTION

Note that ] am comparing the
manufacturer’s suggested retail
price of 1991 vehicles offered in
1990 with the MSRPs of 1991
vehicles offered in 1991. This is
not a comparison of 1990 vehicle
prices with 1991 vehicle prices.

Most automobile manufacturers
did increase prices from the 1990
to 1991 model year, as they do
every year.

I am also not taking into ac-
count GST rebates and other price
reductions offered by some
automobile companies last year
that were designed to compensate
for the reduction in prices this
year.

Here are some examples of new
car prices which illustrate the dif-
ferences from last year.

In the economy car segment, a
two-door Chevrolet Sprint hat-
chback with a five-speed manual
transmission was $8,728 (MSRP)
in December. This year it is
$7,765 (MSRP), $963 less, or an
11 per cent reduction.

Even after adding seven per
cent GST to the 199] price of a
Sprint hatchback, the price comes
to $8,308; $420 less than last year.

Freight charges and pre-dealer
inspection charges are over and
above the price. Freight charges,
by the way, are not subject to the
GST, neither were they subject to
the FST last year. In most cases,
freight charges will be exactly the
same as last year.

Since retail prices are lower, so
is the amount of provincial sales
tax paid by the purchaser. For ex-
ample, in the Sprint's case it is six
per cent of $8,308 ($498) instead
of six per cent of $8,728 ($524), a
reduction of $26.

Luxury cars may be the best
buy of all. In pure dollar terms,
prices are considerably lower.

For example, General Motor's
most expensive car, the Cadillac
Allante, was $82,270 last year.
Now it’s $73,998 (plus 3600
freight); $8,272 less than last year.
Even with the added GST. the
Allante is still $3,142 cheaper!

The GST was directly responsi-
ble for poor sales of fleet vehicles
in the latter half of 1990. Fleet
buyers of private companies and

government agencies, realizing
that vehicles would be cheaper in
1991, virtually stopped buying
vehicles altogether.
Sales of fleet

vehicles have

picked up considerably in
January. Fleet vehicles, by the
way, make up abcut 20 per cent
of all new vehicles sold in
Canada.

Some new car prices haven't
changed since last year. A few
automobile companies anticipated
the reduction in prices in 1991 and
offered rebates in order to keep
customers coming into the

Friday, January 25, 1991 - North Shore News - a1

GST makes new cars cheaper in ’91

showroom in 1990,

BMW, for example, offered
rebates on their 1991 models that
exactly matched 1991 prices in-
cluding GST. Last year, the sug-
gested retail price of a 1991 BMW
318i, after GST rebate, was
$24,900.

This year, it is $23,270 (10 per
cent less). But when GST is added
on, it comes to $24,900, the same

as last year.

Automobile sales have slumped
in recent months, and some man-
ufacturers are still offering rebares
and low interest financing to at-
tract buyers. Combined with lower
new car prices related to the GST,
and intense competition in the
marketplace, new car buyers
should be able to get a very good
price on a new car right now.

Yow You’ve Seen The Wheels

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Notthshore ore

700 a — North Vancouver

Hon, “Thurs
ied Sat.

987- 4458 |

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