New federal proposal to save motorists $1,000 annually on vehicle costs

The federal government says Australians can save around $1,000 per vehicle annually under a new policy it announced overnight.

The government says the proposed policy may also provide an opportunity to save Australian motorists $100 billion in fuel costs between now and 2050.

According to Australia’s Minister for Climate Change and Energy Chris Bowen, the New Vehicle Efficiency Standard is being introduced at a time when Australia stands alongside Russia as one of the only advanced economies without a similar policy.

Minister Bowen said the US has had a similar policy in place for 50 years, but decades of delay and denial in taking up the move means Australian families and businesses are losing thousands of dollars at the petrol pump.

Increased options

Under the new policy, car makers will be urged to give Australian motorists more choices of new cars, utes and vans that use less fuel and that have until now only been available to buyers in overseas markets.

The preferred model for the New Vehicle Efficiency Standard has been under development since the Government committed to it last year—to ensure it strikes the right balance in giving Australians more choice while using less petrol.

The policy will only apply to new passenger and light commercial vehicles, not used or existing vehicles.

According to minister Bowen, the policy works by providing car companies with targets for average emissions per kilometre from new vehicles sold.

It is also aimed at delivering more vehicles to Australia with the latest engine and design technologies to ensure lower fuel bills, meaning bigger savings at the petrol pump.

Consultation underway

The government has commenced consultation to help identify a preferred model before introducing the policy into legislation as soon as possible, with the new cost-saving rules to come into effect by 1 January 2025.

“This is about ensuring Australian families and businesses can choose the latest and most efficient cars and utes, whether they’re petrol and diesel engines, or hybrid, or electric,” minister Bowen said.

Federal Minister for Transport, Regional Development and Local Government Catherine King said the standard doesn’t dictate what sort of car or ute people can buy, but will mean motorists have a wider range of modern and cheaper to run vehicles.

“As you make the choice about your next car, it’s only fair you have the widest range of options possible to get the car that is right for you and right for your hip pocket.”