Can you really afford the risks posed by costlier online tyres?
Recently, I wrote a couple of articles about online tyres. In the second of those articles, I asked, is it cheaper to buy tyres online? We’d had a customer come into our tyre shop here in Darra, asking us to fit tyres that he’d bought online to his vehicle. We pointed out that he hadn’t needed new tyres. The ones he already had would have lasted another 20,000 kilometres. He’d splashed out $400 on tyres he didn’t need.
Soon, those $400 tyres will soon cost an extra $40. You see, buying tyres online in Australia just got 10% dearer.
Imported tyres sold online are now taxed
One of the major reasons for buying tyres online seems cheaper is that until now you won’t have been charged Goods and Service Tax (GST) on them. Items costing less than $1,000 and bought on the web were exempt from tax. And when you consider that retailers from overseas also remove their sales taxes (such as VAT in the UK), this meant that online retailers could make their tyre prices really competitive.
This advantage has now been removed. The online retailers won’t simply eat this tax, either. So, they will pass it on to you, the Australian tyre buyer. From July 1st this year, you can expect to see tyre prices from online retailers jump by 10%.
Expect to see some online tyre retailers close shop
One of the drawbacks of adding GST to online sales is the high costs of collecting the tax on low-value imports. The solution is to pass the burden onto the online retailer. Now, they must register with the Australian Tax Office (ATO), collect the GST from the customer, and pay it to the ATO.
It is going to get more complicated and more expensive for online tyre retailers from overseas to sell into Australia. They need to overcome more admin, tougher rules on compliance, collecting and paying GST, and the unique logistic challenges of distribution in Australia. For some, this extra burden of work and higher costs, combined with a less competitive price, will be enough to see them close down their Australian web sales.
Australian tyre retailers now on a leveller playing field
A spokesperson for the ATO said that this change had been made to “ensure Australian businesses can compete on a level playing field with overseas sales”. As far as tyres go, I think this puts us at a distinct advantage. The only real advantage of that online retailers had was the price. Higher online prices will make savvy tyre buyers concentrate on what you must know before buying tyres online. For example, you won’t get:
- Safety checks
- The knowledge that you are buying genuine and not fake tyres
- A real total cost, including fitting tyres, and balancing and aligning wheels
Our advice is to always get advice when it comes to tyres. They are the only part of your vehicle that is in contact with the road. They play a major part in your safety and comfort. Taking risks by buying online just got 10% more expensive.
For a professional and personal tyre service that you can trust, contact Darra Tyres today.
Keeping your family and fleet safe,