A year older, 13 to 15 per cent lower - Revised car-importation policy to lower prices

On Tuesday, Minister of Industry, Investment and Commerce Dr Christopher Tufton announced that starting December 1, the importation age limit on two categories of motor-vehicles will be increased by a year. The age limit on motor vehicles goes to five years and that on light commercial vehicles is six years.

With many persons anticipating a sharp decline in prices, which would allow them to purchase a motor vehicle, head of the Loss Adjusters Association of Jamaica, David McKay, is estimating a 13 to 15 per cent reduction at the upper band of the allowable range. "Depending on the type of motorvehicle, you can get a 2006 for 13 to 15 per cent less than what a 2007 would cost," he said.

With the year a motorvehicle was manufactured being the starting point for determining its value, McKay pointed out that motor vehicles depreciate at different rates. "A BMW would not depreciate at the same rate as a [Toyota] Corolla. Higher-end motorvehicles have a lower depreciation rate," he said.

It is possible that very low mileage motor vehicles at the upper end of the permissible importation age will be sourced, which would have an effect on the value. McKay said that there is a top value for a particular model and year, based on a very good condition and low mileage. If, additionally, the mileage is lower than average, then the vehicle would be worth more.

With motor vehicles taking a few months to land in Jamaica from their country origin, McKay said he expects the first of units which can now enter Jamaica, based on the revised policy, to arrive in February and March 2012.

In terms of the new policy possibly affecting the prices of vehicles already in the island, McKay said "I don't see it affecting the market much". And, he said, "I don't see it affecting the new car prices at all".