The 2019 financial year is ending. If you’ve been waiting for a good time to purchase a new vehicle, then this is it. Buying a car this winter, just before tax time is your best chance to get some fantastic deals.
There are two main reasons behind this:
- First, the automotive market in Australia did not do well from January to April 2019. New car sales are down by more than eight percent compared to the same period last year so dealers will be wanting to win you over.
- Second, car importers and distributors want to get rid of the old stock left after the end of the financial year. If the revenue is down and a good number of old cars remain, then they’ll be anxious to make more sales.
This is where we get the End of Financial Year (EOFY) sales. Car companies will be dolling out wholesale incentives to the dealers just to clear out the old stock. The dealerships, in turn, will come up with the best deals to entice you to buy. For these reasons, the EOFY sales are your best chance to buy a new car with a considerable discount.
The EOFY Sales
To give you an idea of how huge the EOFY sales are to car companies, let’s look at Toyota. For the 2017 financial year, Toyota Australia had sold 216,566 cars and 24,546 of these vehicles alone were sold in June 2017. That’s 11.3% of Toyota’s total sales for the year sold in just a month.
Even a high-end brand like Mercedes-Benz experienced a spike in sales during the end of the 2018 financial year. 13.3% of the company’s 37,000 total car sales happened in the month of June alone, which amounts to 4,921 cars sold before last year’s tax time.
Dealers Talk Turkey
Buying a car before tax time is also your best chance to interact with dealers who will talk turkey to you – this means they will do everything to make you happy if you’re a serious buyer. The dealers can even go as far as to persuade the importer/distributor to reduce the cost even further, just so they can offer you the best deal possible.
Visit the dealerships on any day leading to June 30, the end of the financial year, and you might get a car for thousands of dollars less than the normal asking price. And it doesn’t matter if you’re taking the delivery immediately or not. You can still get the best car deal available even if you plan to have the vehicle registered by July or much later.
The closer to June 30 you buy a car, the more persuadable the dealers and sales staff will be. That’s because aside from the EOFY sales, they also have quarterly and monthly quotas. So, make sure to shop at the end of the month, and you’ll have a better chance of positive responses to your bargaining.
Get More Perks
Aside from the discounts, buying a car before tax time will give you access to bonuses if you’re operating a small business. One is the increased amount you can write off your tax when you buy a car. That’s because the Australian government has recently raised the instant asset write off from $20,000 to $30,000 in the federal budget.
Also, June is the month when car manufacturers give retailers some extra bonuses. They do this just to sell the remaining slow-selling stock in their factories, such as vehicles with an uncommon colour or not-so-popular models in a particular market.
Don’t be quick to dismiss the vehicles that dealers are keen to sell (they tend to be in the front row with large banners advertising them). If you’re not fussed on the colour or even the model, then your new car purchase may be very affordable indeed.
Old Stock Vs New Stock
To give you a heads up, not all cars on sale towards the end of the financial year are new stock. Some of the vehicles on display at the dealerships may have been built the previous year. Don’t ignore them because they might be just what you are looking for.
These cars will be a lot cheaper than their brand new counterparts. They may not retain their market value as well but if you plan to hang on to the vehicle for more than four years, this will not matter much.
You may also want to consider buying a demonstrator vehicle. These cars have been used by the dealership for consumer test driving, car shows, photo shoots, and TV commercials. It’s considered a used car but with the quality of a brand-new car.
Since demonstrator vehicles are intended for promotions and test-driving, they have the most advanced features available. But since they’ve already run a few kilometres, they are much cheaper compared to new cars. If sold during EOFY sales, then you could stand to save a considerable amount.
EOFY Buying Guide
If you would like to take advantage of the great deals at the end of financial year, it’s best to be prepared before you step into the dealerships:
1. Determine which car make and model you want to buy
2. Get pre-approved car finance for more negotiating power
3. At the dealerships, check if the car is available in the current year model, last year’s model, and demonstrator model
4. Compare the vehicles in terms of features and specifications, and get the best quote for each of them
5. Get multiple quotes from 3-4 dealerships, including a trade-in if you plan to sell your old car
6. Once you’ve found the car model you want, ask the dealer about any additional deals or discounts before signing the sales contract.
7. If you own a small business, remember the asset write-off incentive.
Tips for Buying a Car Before Tax Time
Do your research! This is important no matter what time of year you are purchasing a new vehicle. Have your preferences handy and be prepared before you hit the dealerships.
Don’t forget to shop around because there might be a better deal you can get at another dealership. If you own an older car, see if you can get a good trade-in deal.
Ask for some extras! These can include an extended warranty, headlight protectors, and floor mats. However, always be cautious. If the extras are offered in place of a cash discount, then politely refuse and ask for a cash discount instead.
Finally, make sure to research the car’s normal asking price, as well as what the usual inclusions are, so you will not fall for a deal that has no additional discounts or extras.
Get a Pre-approved Car Loan
Buying a car before the end of financial year is a good move if you wish to save off the cost of the purchase and get a few bonus inclusions thrown in the deal. But it’s always a good idea to get your car finance pre-approved first with Aussie Car Loans.
Whether you are plan on purchasing a brand-new car, old stock, used or a demo car; a pre-approved loan will give you confidence to bargain with the dealers when shopping around.