5 reasons why EOFY could be a great time to buy a new car

Find out how you can take advantage of EOFY car sales and how to get a vehicle loan

17 May 2022|4 minute read

mother and son in new car

The sale period leading up to the end of the financial year is one of the most popular times to buy big ticket items like a new or used car.

In this article, we explain why car deals are more abundant during tax time and 5 things to consider if you’re thinking of taking the plunge.

Why are car deals usually better during the end of the financial year?

Thanks to dealer and manufacturer-driven demand to move excess stock from their balance sheets before June 30, you might have the opportunity to save thousands of dollars on your next car

Additionally, many of the big brands and dealerships could offer you a great deal or discounted price to stand out from the competition.

If you’ve been on the lookout for a new car, it may be worth gearing up by doing some research in the lead up to EOFY. 

It’s also beneficial to obtain early loan approvals before stepping into a car dealership. Due to strong buyer demand and less stock availability in the aftermath of the pandemic, getting your loan approved early can help you avoid possible disappointment.

What are the 5 reasons EOFY may be a great time to buy a car?

If you’ve been tempted by the thought of driving around in a new car and finally getting rid of your old one, here are our 5 things you might want to consider.

1. There are great sales offers

Every year, car manufacturers and dealerships cut prices and offer huge discounts on cars leading up to 30 June. 

Car dealers usually weigh up the revenue and profit they’ve made over the year against their targets. This way, they can tally the stock they have on hand to work out their sales and sometimes offer thousands in savings on new and demonstrator cars.

Another temptation (alongside the discounts) are the value adds like free on-road costs, upgrades and optional extras like alloy wheels. They can also offer extended warranties which means you could nab a great deal on your next car.

EOFY is a busy time to buy a new car so it’s helpful to know the make and model you’re after and understand what you’re buying before heading to a showroom to get the deal done.

Ultimately it is your choice, so make sure you are happy with the car you are looking to purchase and avoid being swayed by discounts and value adds if the car is not right for you.

2. You could get a good price on a trade-in

There’s been a massive demand for second-hand cars with fewer vehicle imports in recent years. Additionally, people have opted to avoid public transport and others are keen to hit the road for some local travel.

For this reason, now could be a good time to secure a great price on your trade-in to go towards your next car.

If you have a car you want to trade in, it may be helpful to have an idea of how much your current car is worth. This can help you prepare to negotiate a good trade-in deal. You can do this with free online valuation tools from drive.com.au or carsales.com.au.

When filling out your details make sure that you know the difference between the build year and model year (for example, the build year could be 2019 for a 2020 model). The dealer will price the trade-in from the build year, which depreciates the older it becomes.

When dealerships provide you a quote to trade-in, make sure this lines up with what you have researched to ensure you’re getting a fair deal. If it doesn’t, it might be worthlooking into other routes to sell.

Another tip is to make sure any repairs are done prior to inspection and negotiating a deal as this could affect the value of your trade-in price.

3. Low interest rates 

While interest rates have started to rise, these increases are coming off the back of historically low rates. This means vehicle finance continues to offer competitive interest rates.

So, right now may be the optimal time to consider a car loan to purchase the new car you have been dreaming of.

Vehicle finance is often offered on a fixed interest rate instead of variable interest rates, so you can have peace of mind knowing your loan repayments won’t change during your loan term.

4. You may be able to claim it as a tax write-off

The government offers instant asset write-off for eligible businesses. This allows small businesses to claim the depreciation amount (the amount of value something is likely to lose over time) of a work-related purchase like a car.

To be fully expensed, vehicles must be able to tow 4 tonnes or more or have passenger capacity of greater than 9 people. Vehicles that do not meet this can expense up to $60,733 for the 2021-2022 income year.

So, if you own a business or use your vehicle for business purposes, EOFY could be a fantastic opportunity for you to purchase a new car as a tax deductible expense. You can check with your accountant what applies to you.

The ‘instant asset write-off’ eligibility criteria and threshold changes over time, so make sure you check these before purchasing a car to understand what your write-off may be.

5. Brokers can find the right deal for you

If you’re looking to buy a car at the end of the financial year, an Aussie Broker can help you find a fair deal for finance.

When speaking to dealerships, it can help to be wary of the finance solutions they offer. They may not be interested in negotiating the best deal for you and could be limited in what they can offer if they only have access to one financier.

Some dealerships will quote fees and interest base rates instead of the effective rate.

Working with an Aussie Broker can take the hassle and complexity out of the process and help you find the right asset finance deal. Reach out today to review your options.

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