Is EOFY really a good time to buy a car?
In general, End Of Financial Year (EOFY) sales are a great time to buy a car if you are looking for a bargain, so long as you apply the same diligence to your purchase as you would at any other time of year.
Why do dealers offer bigger discounts in June? 1
June sales are everywhere, but the trend is particularly pronounced in the car industry. At the end of the financial year, most car companies will do a stocktake, as well as calculate yearly sales, revenue, profit and so on. They want stock to be at a minimum, so they offer car dealers wholesale incentives to get rid of old stock. Essentially, the whole retail supply chain goes into discounting overdrive, giving customers an opportunity to secure heavily discounted prices.
Dealers and their sales staff also have sales quotas to meet each month, so the closer it is to the end of June, the more likely it may be that the salesperson will give you a better deal.
In addition, factories will often offer retailers bonuses to sell vehicles in June, particularly for ‘slow-selling’ stock. Dealers are particularly under pressure to sell any remaining stock from the previous year. So, if you are willing to be flexible, that is if you don’t mind last year’s model or a less popular colour, you might grab an even bigger bargain.
How much of a discount can I get?
Negotiating is hard for many of us, but buying in June usually makes this part easier. This can particularly be the case near the end of June, as dealers and sales people get more ‘desperate’ to move the stock, meet their targets and get a bonus. You may be able to save thousands of dollars on a standard mid-range vehicle and sometimes even tens of thousands on a prestige car. If the price has already been significantly discounted, but you are still pushing for more (and the salesperson really wants the sale), they may even contact the wholesaler about reducing the cost further.1
Good to know:
- The market for new cars was down by over eight per cent over the first four months of 2019, making dealers more anxious to make sales.1
- Ask to have ‘extras’ thrown in, such as mats, towbars or tints as well as discounts for ‘on-road costs’ such as third-party CTP insurance, stamp duty and registration fees.
- Do your research, know what you want and know what price you can get it for elsewhere. Don’t be afraid to shop around or walk away from a ‘deal’ if you’re not convinced.
What to watch out for:
- If you are offered ‘free accessories’ valued at a certain amount, instead you may be better off getting that amount off the price, and buying the accessories elsewhere.
- While interest rates are coming down so you may be able to finance a more expensive car, this doesn’t mean you should. A car is not an investment; it is a depreciating asset.
- Be careful about accepting the finance solution available at your dealership. They may offer you a zero per cent interest deal, but a close read of the terms and conditions may reveal the deal is generally not as good as it seems. There can be hidden fees and charges, a loan structure that doesn’t suit your needs, or the purchase price may not be negotiable.
Financing your new car
Many Mortgage Choice brokers can arrange asset finance for you. While some people may choose to redraw on their home loan to finance their car, using asset finance can often be a better way and can even save you money in the long run. Mortgage Choice brokers have access to a wide range of lenders who provide competitively priced, transparent vehicle finance. They will assist you with getting the most appropriate finance option and guide you through the application process. Get in touch with your Mortgage Choice broker today.
SOURCE: 1 https://www.carsales.com.au/editorial/details/buying-at-the-end-of-the-financial-year-112738/, 2 https://www.carsguide.com.au/car-advice/australian-car-market-car-sales-statistics-and-figures-70982
