This post is made in partnership with Savvy Car Loans.
While these ad campaigns on steroids often herald little real value, one sector that appears to follow through with more perceived value than others, is the automotive industry.
This June, new car sales are expected to hit an all-time record which is tipped to beat last June’s record of 134,171 new car sales. Given the new car market is up by 3.3% year to date in 2018, a new spike is likely.
In June last year there was a 30% increase of new sales from the previous year and the same, if not more, is expected this year. So what’s driving this frenzy of automotive consumption and does it warrant real consumer value?
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Firstly, car dealerships have aggressive yearly sales targets so many of them will use EOFY sales to clear their outdated stock. Low interest rates and incentives such as waivering stamp duty, registration fees and dealer delivery fees also figure prominently in limited time offers.
Some manufacturers also offer factory bonuses, cash back schemes and give away free fuel cards.
Another factor in the surge of sales is the number of Australian businesses taking advantage of the $20,000 instant asset tax write-off before the end of June.
Australian online financial institution and BRW’s fastest growing company in 2015, Savvy, attributed much of the record activity over the past two years to the business sector using the $20,000 instant asset tax write-off.
CEO Bill Tsouvalas says Savvy Car Loans has many business customers who are self-employed or tradespeople who upgraded their vehicles before the end of the financial year to take advantage of the tax concession.
“For our company, tradies and self employed individuals wanted to make the most of this benefit for their tax returns. Many businesses are also claiming back the GST on the purchase of their vehicles on their next BAS statement,” he said.
Tsouvalas has been in the industry for 10 years and says the cost savings for buying a new car at EOFY sales range between 7-10% but vary between manufacturers because “Toyota and Nissan are always very aggressive”.
He adds that recent findings from the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, indicated that 90% of Australian car sales require car financing.
“This is why it’s best to get pre-approval for a car loan so you can negotiate the best price when visiting a dealer.”