Benefits of Reducing the Age of Australia’s Light Vehicle Fleet

The age of the Australian light vehicle fleet has remained consistently high compared to other developed nations, raising serious concerns over safety and vehicle emissions. Despite the nation’s economic status as a relatively wealthy country, Australians own passenger vehicles that are on average 9.8 years old and light commercial vehicles that are on average 10.4 years old. The legacy of Australia’s outdated car fleet is one of substandard safety features that fail to prevent road deaths. This is coupled with the added detriment of greater-than-necessary vehicle emissions.

Light vehicle fleet 1

The Australian Automobile Association (AAA) has commissioned Economic Connections (ECON), with Pekol Traffic and Transport and Monash University Accident Research Centre to analyse the benefits of a one-year reduction in the average age of Australia’s light vehicle fleet. This report has modelled the outcome based on two separate scenarios for the benefit of comparison and charted the benefits over a period of 20 years. The first scenario deals with the lowering of the age of the fleet by one year in a short take up period – of four years.

Light vehicle fleet 2

The second scenario deals with lowering the fleet age by one year in a longer take up period – of eight years. The results have shown the short take up period (four years) would yield a benefit of 1,377 lives saved. The economic results of this reduced road trauma coupled with the emission reduction benefits over the 20 years would total $19.7 billion. The second scenario with a longer take up period (eight years) would save 1,206 lives. The road trauma and emission reduction benefits over the 20 years would total $16.8 billion.

Light vehicle fleet 3

The cost of new cars is a significant deterrent for consumers, however the Government could lower the price of new vehicles by abolishing tariffs (especially given the end of the Australian car manufacturing industry) and the luxury car tax (LCT) – which would save consumers about $4.7 billion over the forward estimates. The Government could also ensure the broader Australian tax regime encouraged the purchase of safer vehicles. The AAA urges the Australian Government to use these levers to reduce the vehicle fleet age given the significant productivity, environmental and safety benefits.

Read the report here…