Mr Johnston said New Zealand reckons Kiwi consumers have been getting cheaper, better cars since the market was deregulated in the mid-1980s.

"New Zealand was held very much [to] ransom by the vehicle suppliers," said Mr Johnson, whose family has been running the used-car dealership Genuine Vehicle Imports since 1982.

"The price was held high purely due to supply, but since the market was opened up for imports they get value for money and the quality of vehicles improved as well."

Mr Pendergast said he has been able to run a successful luxury-car business, Road and Track, in Sydney for the past 18 years because it was much cheaper to buy second-hand cars from overseas, including New Zealand, and resell in Australia.

Auckland-based car dealer Hayden Johnston is selling an almost identical Audi for $NZ25,000 ($23,000). Lawrence Smith

"I've been buying cars in New Zealand and selling them in Australia. That can only work if there's a margin," Mr Pendergast said.

"If there is a change in legislation, particularly around eligibility restrictions, you would see more vehicles sourced from New Zealand and around the world and you'd find cars become much cheaper."

'Already competitive market'


The Minister for Territories, Local Government and Major Projects, Paul Fletcher, said there was already a "competitive second-hand market" in Australia and deregulating the market would put dirtier, more dangerous cars on the road.

"The New Zealand experience is instructive. In that country, 50 per cent of all car imports are used cars with an average age of around eight to nine years," Mr Fletcher's spokeswoman said in an email.

"This has led to an increase in the fleet average age – which is now at 14 years – and slowed the rollout of new safety and emissions reduction technologies through the fleet."

The government's position echoes the arguments of the car lobby group Federal Chamber of Automotive Industries, which opposes parallel imports on the basis of safety and environmental protection.

The government's position contradicts the Productivity Commission's findings, which were endorsed in the Harper competition review.

The Productivity Commission said if the government relaxed import rules to favour increased supply of late-model used cars, it could lower the average age of the vehicles and improve safety and emission standards.

Relaxing restrictions should begin with cars under five years old since the date of manufacture, the commission recommended last year.


Loss for consumers

Mr Pendergast said the price difference between Australian and New Zealand luxury second-hand cars varied depending on the car model, from 100 per cent to 20 per cent in the more competitive segments of the market.

Unlike New Zealand, Australia also has luxury car tax, which puts pressure on the used-car market.

But it is not just the luxury-car market that is benefiting from the relaxed import rules in New Zealand.

Trademe.co.nz data shows the average asking prices for top-selling used cars in New Zealand are surprisingly low: $2200 for a Toyota Corolla, $7400 for a Toyota Hilux and $2100 for a Subaru Legacy.

One Wellington-based luxury-car dealer, who did not want his name or company mentioned, said Australian customers who were initially interested in directly importing a car were discouraged to do so because of the restrictions on imports.

"We've had a few guys from Australia on a [Porsche] 911 . . . 100 per cent said actually it works out to be about the same by the time you pay tax and shipping and whatnot," he said.

In Australia there is a $12,000 specific tariff on imported second-hand cars and dealers can only import a single vehicle at a time. Specialist importers are prohibited from bringing in more than 100 used vehicles in each category in a year.