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

Get ready, end of financial year (EOFY) is fast approaching, which means you could take advantage of EOFY car sales

09 April 2021|3 minute read

mother and son in new car

The sale period leading up to the end of financial year is one of the most popular times to buy big ticket items like cars, with the opportunity to save thousands on your next car thanks to a combination of dealer and manufacturer driven demand to move excess stock from their balance sheets before June 30.  

If you have been looking to buy a new car, it is definitely worth considering it in the lead up to the end of the financial year as many of the big car brands and dealerships will fight for your attention and could offer you a car at a great discounted price.

The combination of strong buyer demand and less stock availability due to the pandemic makes it crucial to obtain early loan approvals before stepping into a car dealership so you can avoid possible disappointment.

If you have been tempted by the thought of driving around in a new car and ready to get rid of your old, money chewing car, here are our 5 reasons why you should take the plunge.

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

1. There are great sales offers

Every year, car manufacturers and dealerships cut prices and offer huge discounts on cars leading up to June 30. Car dealers usually weigh up the revenue and profit they’ve made over the year against their targets and tally the stock they have on hand to work out their sales, sometimes offering thousands in savings on new and demonstrator cars.

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

It is a busy time to buy a new car so it’s helpful to know the make and model you want and understand what you are buying before heading to a showroom to get the deal done before EOFY. Ultimately it is your choice, so make sure you are happy with the car you are looking to purchase and are not thrown by the discounts and value adds.

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

There is a massive demand for second-hand cars with fewer vehicle imports and many people still avoiding public transport or keen to hit the road to go travelling locally, with no overseas travel on the horizon for a while. This means that right now is a good time to secure a great price on your trade-in which could go towards your next car.

If you have a car you want to trade in, it is a good idea to have a rough figure in mind on how much your current car is worth so you can be ready 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 the 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 is older with more depreciation. When the dealerships provide you a quote to trade-in, make sure this lines up with what you have researched prior or take another route to sell.

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

3. Low interest rates  

The RBA interest rates are the lowest we’ve ever seen in history and many lenders have released new interest rates taking advantage of the lower cash rate.

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

As asset finance works on fixed interest rates instead of variable interest rates, the interest rate and your car loan repayments are fixed and won't change.

This means, you'll know exactly how much will come out of your bank account for repayments each month and you could save on paying more in the long run with current record low interest rates.

4. You can claim it as a tax write off

The government offers instant asset write-off for eligible businesses, as a way of allowing small business 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 tonne or more, or have passenger capacity of greater than 9 people. Vehicles that do not meet this can expense up to $59,136 for the 2020-2021 income year.

So, if you own a business or use your vehicle for business use, EOFY could be a fantastic opportunity for you to purchase a new car as it can be an expense deductible. 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 are looking to buy a car at the end of the financial year, then an Aussie Broker can help you get that dream car.

Buyers also need to be wary of fees and interest base rates being quoted rather than the effective rate.

When speaking to dealerships, be wary of the finance solutions they offer. They may not be interested in negotiating the best deal and are limited with what they can offer you as they usually only have access to one financier.

Working with an Aussie Broker can take the hassle and complexity out of the process in finding the right asset finance deal for you.

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