Call to drop tariffs on imported cars

The federal government has been urged to axe the tariffs on imported vehicles after Toyota's decision to cease making cars in Australia from 2017.

The Australian Automobile Association says the estimated $1 billion a year the government receives from the 5 per cent tariff should be returned to consumers.

"If tariffs were designed to help protect the local industry then there is no longer any justification to maintain them," association chief executive Andrew McKellar told ABC radio on Wednesday.

The AAA estimates the removal of tariffs could save the average new car buyer up to $2000.

Imported vehicles make up about 90 per cent of the new-car market.

Treasurer Joe Hockey said the legitimate argument for dropping tariffs to make importing cars cheaper would be considered as part of the government's tax white paper to come before the end of the term.