Car companies have started to pass on savings as a result of the new free trade agreement with Japan.

The agreement involves the abolition of a five per cent import tariff on new cars imported into Australia from January 15. But cars have not become five per cent cheaper.

Manufacturers pay the import duty on the cost price of new cars imported to Australia - a figure not revealed to the public, and less than the retail sale price.

Toyota's entry-level Corolla has dipped by $500 to $19,490, which represents 2.5 per cent in savings, the same discount for Subaru's $750 price drop for the XV.

Mazda's maximum discount of $963 for the CX-9 amounts to 2 per cent in savings.

Mazda has been generous in offering customers have a head start on new prices, discounting cars from January 1, around two weeks before the new duty comes into affect.

Japanese cars such as the Mazda3 have become cheaper under a nrew free trade agreement.

Petrol-powered Mazda3, Mazda6, CX-5 and CX-9 models have dropped by $403 to $963, while diesel discounts range from $268 to $347. Further drops in diesel duties will arrive in the next two to three years.

Mazda2 and BT-50 models built in Thailand already benefit from an existing free trade agreement between Canberra and Bangkok.

Like Mazda, Toyota has passed on savings from January 1, though its top discounts are more generous.

Toyota's savings range from $500 in the Corolla Ascent to $7,630 in the top-end Prado Kakadu – an 8.2 per cent discount on its previous price.

Japanese cars such as the Mazda3 have become cheaper under a nrew free trade agreement.

More than 50 Toyota models are at least $1000 cheaper in 2015, including RAV4 models cut by up to $2300 – or 4.8 per cent of their 2014 price.

Toyota's discounts also include existing stock, vehicles outsife the scope of the new FTA agreement.

But models built outside Japan, such as the US-sourced Kluger SUV, do not benefit from a price cut.

Subaru has announced it will drop prices on Forester, XV and Impreza models from January 16.

Prices for the Forester range will reduce by $1000, along with discounts of $750 for the XV and $500 for the Impreza.

Sporty WRX and BRZ models have not grown cheaper. The brand has already passed on savings in its new Liberty and Outback range, which are up to 25 per cent cheaper than outgoing models.

A free trade agreement between Australia and South Korea has not yet resulted in significant savings for motorists.

Update: The five per cent imported vehicle tariff for new vehicles applies to the cost of cars imported to Australia, not the retail price paid by consumers. Retail price reductions of less than five per cent do not necessarily mean car companies are unreasonably absorbing tax changes.