What could be a good time to buy a car in Australia?

June, the end of the financial year (EOFY) for Australia, is often considered a good time of the year to buy a car. This is when car manufacturers and dealerships are generally slashing prices, offering cheaper financing, or free servicing for vehicles, to help maximise yearly profits and reach their EOFY targets.    

This could be a good time to buy your car at a discount, receive a bonus like an extended warranty, roadside assistance, or free accessories such as floor mats, alloy wheels and window tinting. It could also help some business buyers gain a tax advantage.

That said, remember that Australian car dealerships know that June is when many customers are looking to upgrade their car. Therefore, the deal you get may not be as beneficial as during other sales times of the year for that specific dealership.  

Also, some car makers, such as Japanese car manufacturers, have a different end of the financial year date, such as March. You may want to check the specific EOFY period for the car brand you are planning to buy.

December could also be a great time to buy your car. Dealers are often more motivated to sell their cars because they will soon become last year’s models. A car with the previous year's build plate is usually harder to shift into the New Year, so you may be able to look forward to various incentives from dealers to sell in December, such as additional equipment and even cash bonuses.

Also, keep in mind that new European, Japanese and South Korean car models may spend about two to three months on a ship to make their way to Australia. This means that the car you buy in December may have rolled off the production line in August or September.

The new year could also have clearance sales of the previous year's cars at discounted prices. January is a carry-over month of the previous year's cars for dealers, who are motivated to sell them at discounted rates before February-March when these cars become less appealing to buyers.

It's good to be aware that every car in Australia carries a build plate and a compliance plate, each of which can be found in the engine bay. The build plate has the unique vehicle identification number (VIN) and the engine, transmission, and paint codes, along with the date of manufacture, which is usually the month and year. The compliance plate confirms the VIN and has the month and year the vehicle was certified as compliant with the Australian Design Rules (ADR) and approved for sale.

In the case of vehicles that have been imported into Australia and have travel times on ships, the date of compliance will be different from the date of manufacture. For example, if you purchased and registered your new car in March 2021, it will show 2021 on the compliance plate, but the build plate may list the date of manufacture as November 2020. The build plate date counts to show the model year of the car, which in this case is 2020.

It's always a good idea to clarify the build date of the car you intend to buy.  In extreme cases of slow-moving models, what looks like a 2024 model could well be a 2022 one, if it has been lying around unsold at the dealer or distributor.

Car dealers and salespeople often have end-of-month sales targets to achieve, or perhaps a certain volume of sales to make at the end of the month, to receive a bonus. This means you may be able to get good end-of-month discounts from some dealers when buying a new car.

New car models will run out of their sheen and demand after a couple of years as newer models arrive, even though these cars are often perfectly fine to drive. It’s good to know how long a model has been on sale or how soon a new or updated version is likely to arrive, as this could put you in an excellent position to negotiate. 

For example, if a car has been around for three or four years, it is likely to be due for an update. Similarly, if a vehicle has been around for over seven years, a new model is often expected to be on the way. Both these scenarios could help you bargain on the price of model run-out cars.

Once you’ve worked out the right time for you to buy a car, you’ll still need to sort out how you’re going to pay for your discounted vehicle. Unless you’ve saved up enough cash to buy a car outright, you may need to arrange some type of car finance.

Depending on how you plan to use your car, there are a wide range of car finance options to consider, which may suit some financial situations better than others. For example, if you need a car for business use, you could consider options such as a chattel mortgage, car lease, novated lease or hire purchase, which could offer convenience and also some tax advantages. For cars for personal use, you could look at dealer finance, though there are also car loans available from banks and other non-bank lenders to consider, including specialist car financiers.

Whichever you’re interested in, it’s important to compare the options available to you, calculate the costs involved, and weigh up the features and benefits versus the costs and risks. This will help you work out which option could offer you the most value, and determine the best choice for your needs.