Is EOFY actually a good time to buy a car?
If you’re in the market for a new or used car, making a purchase at the end of the financial year is considered a great time for drivers to nab a competitive deal. Let’s explore whether this sentiment still rings true, and how you can nab a car loan bargain at any time of the year.
Why is EOFY considered a good time to buy a car?
June is considered the end of the financial year for most businesses in Australia, at least for retailers pushing deals to move stock and increase revenue growth.
This is because the car industry will typically offer stocktake sales in June to calculate their EOFY results with minimal stock but higher sales and profits. And because manufacturers want to make way for upgrades of newer models at the start of the new financial year, which they cannot do without pushing the sale of older models.
Put simply, by offering discounted prices and incentives to buyers, manufacturers are more likely to sell older stock and salespeople can boost their sales numbers to hit targets for the year. This benefits you, the salespeople, and the manufacturer, so it’s worth considering taking advantage of these sales if you see them.
For example, in June 2021, the Federal Chamber of Automotive Industries (FCAI) recorded 110,664 sales of vehicles in the month alone, despite parts of the country under strict COVID-related restrictions. This was the strongest month of sales recorded by the FCAI in 2021.
Vehicles sales in 2021, FCAI
Source: FCAI.com.au
EOFY benefits for purchasing a car
Now you understand why customers are more likely to flock to dealerships during June for a new or used vehicle, let’s explore how many ways you could benefit from considering a vehicle purchase by the EOFY.
- You may nab a discounted price
The main advantage of considering purchasing a vehicle in June is that you may be able to find a heavily discounted price on a vehicle, as per the reasons listed above. While there’s no way to predict just how much of a discount, if any, you may find, it’s worth keeping in mind when you’re comparing your options.
- You may have more leverage
It’s also worth keeping in mind when it comes time to negotiate a deal on the vehicle that June is when you are more likely to have leverage at the dealership. The salespeople need to move the old stock and are being pressured to hit EOFY targets. Even if you can’t negotiate a lower price, you may be in a better position to ask for insurance upgrades, pre-paid registration or interior upgrades.
- Tax benefits for ABN holders
You may be eligible for tax-related benefits for business buyers and sole traders with an ABN purchasing new and used vehicles. The instant asset tax write-off has been a way that the federal government allowed these drivers to claim depreciation for said asset purchased in the same financial year.
During peak-pandemic times, this was replaced with ‘temporary full expensing’ which allowed participants to gain tax benefits faster by reducing the timeline an asset would depreciate over.
How to get a great car loan all year round
You don’t need to wait for an EOFY sale to nab the best car loan for your financial needs and budget. You just need to compare your options and know where to look.
Comparison tools, like comparison tables and calculators, may help you to create a short list of car loan options that could be a better deal than being complacent and sticking with your childhood bank.
Comparison tables allow you to enter your details (car loan amount, loan term) and filter through options that suit your needs. This includes low interest rates, no fees, generous features and more. You’ll be shown options side by side, so you can easily compare each car loan to find competitive options.
RateCity’s Car Loan Repayment Calculator may then allow you to narrow down your shortlist based on how the car loan repayments may fit in with your budget. If you’re prioritising affordability, you’ll be able to identify which car loan could offer the lowest repayments, for example.
By comparing your options you’re ensuring that no matter the time of year or discount you find on a vehicle, your car loan repayments will not break the bank. Plus, you may be able to take advantage of features like a redraw facility or an offset account in the process.
Disclaimer
This article is over two years old, last updated on June 24, 2022. While RateCity makes best efforts to update every important article regularly, the information in this piece may not be as relevant as it once was. Alternatively, please consider checking recent car loans articles.
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