Should drive-away prices include metallic paint?

Since the ACCC's truth in advertising review of the automotive industry a year ago, car buyers have been able to get a better idea of the real drive-away prices of new motor vehicles.

But a potential loophole has emerged in the form of the amount of sparkle each car has in its paint. Most manufacturers charge a price premium for metallic paint colours -- from as little as $300 to as much as $5000 or more on some exotic cars -- even though most available colours are metallic.

Some manufacturers, including volume seller Mazda, do not charge a price premium for metallic paint. So, is charging for extra sparkles a rort? According to an insider at an automotive paint supplier, the cost of metallic paint to car manufacturers -- and the cost of applying it to vehicles -- compared to standard non-metallic paint is "negligible". "We're talking a few cents per litre, not hundreds of dollars," said the insider who did not wish to be named.

On the new Mercedes C-Class for example, metallic paint is a $2000 option, even though nine of the 12 available colours are metallic.

When the Carsales Network asked if metallic paint should be included in the quoted price in advertising when they are the majority of colours offered, Mercedes spokesman David McCarthy said: "I think most people understand that metallic paint is an option. We make it standard on some models. It depends on the package.

"Metallic paint is an option on most cars, just like a sunroof is. I don't think it would be fair to start including every option that's available."

A representative for the other end of the car market, Hyundai spokesman Ben Hershman, agreed: "The fact is it costs us more to bring metallic paint to the market -- at least we are charged a premium by the paint suppliers and the factory."

Hyundai charges as little as $320 for metallic paint on most models in its line-up.

"The current way is fairest because otherwise we would have to spread the cost across all cars, and that's not fair to people who want a white [non metallic] car."

But what if the advertisement quoted the metallic price and the fine print said it was $320 less for non-metallic paint?

"Well then where do you stop?" asked Hershman. "We quote manual transmission prices for cars when in many cases the automatics are the biggest sellers.

"We have studied the issue several times over the past few years and the current system works best. On more expensive cars, the extra cost can be absorbed, but when you're in the more affordable end of the market, it gets too hard to absorb the cost."

The chief executive of the Federal Chamber of Automotive Industries, Andrew McKellar, told the Carsales Network: "A number of brands no longer charge a premium for metallic paint, and the ones who do [charge a premium for metallic paint] make it clear in their advertising under the new advertising guidelines.

"At the end of the day it's a matter for each brand as to whether or not they charge for it or include it in the price.

"Whatever the case, the right thing to do is to provide an accurate price representation to the consumer."

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