How to save money when buying a car during EOFY car sales in Australia
Keep the following tricks in mind to make sure you get the best deal during the sales.
Consider last year's model. You can save a lot by opting for a 'plate runout deal'. These are deals on last year's models that have been sitting around the dealership for a while. Because they're slightly older, dealers usually want to get rid of these cars first. So if you don't mind having a slightly older car, this might be the way to go. Remember that cars depreciate the second they leave the lot anyway!
See how much the car will cost you in the long run. Remember that what you pay for the car isn't the only cost you'll need to think about. When you factor in the cost of insurance and servicing, you could easily bite off more than you can chew. We analysed the cost of car insurance from 10 brands in 6 states for a 30-year-old male driving a Toyota Corolla, and found that the difference in the cost could be hundreds of dollars a year. In Victoria, one policy was $1,504.80 per year, versus the cheapest comparable option, which was $815.34 a year. That's a difference of $689.46! Even on a bad day, that's a return ticket to Bali - which would you rather spend your money on?
Do your research. Don't be swayed by sweet-talking dealers. Come into the dealership knowing what car you want, what model, and what you'll use to pay for it. For instance, a few manufacturers may have facelifted models, giving them additional equipment and slightly revised capabilities, but are they worth coughing up thousands of extra dollars? Crunching the numbers ahead of time is worth it so you can save your hard-earned money. If you're pre-approved for a loan, you can skip the sales pitch and get straight to hammering out a deal.
Cost of delivery. Delivery fees should also be considered carefully when buying a car because they can raise the price despite the dealer offering discounts on the on-road costs.
A car finance expert on the best tips for EOFY sales
We spoke with a car loan expert from Stratton Finance who explained to us why right now is the perfect time to buy a new car.
Which cars promise the biggest savings?
"We see at this time of year customers who are open to buying the same car, but with an older build or compliance, always getting the biggest and best value. Manufacturers don’t promote the fact that older stock begins costing them more money than they can make selling a brand new one."
What are the typical cost savings buyers can expect?
"When it comes to savings we see two dimensions when buying a new or demo car. The first being sale price. Depending on the make and model we see savings between 7% - 23% off the original starting price."
"The second is value-added extras, again depending on the make and model it would be unusual for Stratton customers to not have received complimentary servicing for 2-5 years, free roadside assistance, free factory extras like tinted windows, leather seats or even a sunroof."
Which car financing methods or lending products offer the best tax benefits for business buyers leading up to the end of the financial year?
"During this time of year, we experience a significant increase in enquiries about chattel mortgages and novated leases from both retail and business customers. While each borrower's tax circumstances are different, both chattel mortgages and novated leases offer tax benefits via GST deductions, operating costs for business purposes, and depreciation benefits may also apply."
Can you share any other tax tips for borrowers looking to take out a loan during EOFY sales?
"The single biggest piece of advice I would give is to make sure you get qualified advice from your accountant. From time to time consumers come to Stratton for help on how to get out of a finance contract they entered into with a car dealer or bank that it is not fit for their personal tax circumstances and are now experiencing some potential pain with the tax office."
Car finance options during EOFY sales
Consider pre-approval
Pre-approval can give you the upper hand in the sale as you'll know how much you have to spend and have more bargaining power. Find out more about pre-approval by reading our guide.
Car loans vs personal loans
Car loans come with lower rates than personal loans. So, if your car is new or under two years old you may be better off opting for a secured car loan rather than an unsecured personal loan. You'll usually find rates between 6-10% p.a. and above for a car loan and between 8-16% p.a. for an unsecured personal loan.
Dealership finance
If you're considering dealership finance, remember to check how much of a balloon repayment you'll be required to pay and when. Many dealership finance offers come with a balloon repayment requirement of as much as 50% of the car's purchase price, so keep this in mind when considering the deal.
The End Of Financial Year is 30th June 2024. You can expect car dealers to start running sales anytime from mid-April 2024, right up to the deadline. Sometimes, the promotions even go beyond the EOFY into July, but you need to check the small print.
EOFY sales are usually very attractive, with many dealers across Australia offering great deals on car purchases. In fact, this period is the only time you can get bargains that can save you a couple of thousand dollars with promotions that cover on-road costs, such as third-party CTP insurance, stamp duty and registration fees. Other manufacturers have gone down the route of fitting optional extras for free.
Ben Gribbin is an automotive writer at Finder. He is a life-long car enthusiast, bringing many years of experience working with and writing about cars. During his time, Ben has been a freelance writer, editor and reviewer for a number of leading publications across the UK. He was voted the Guild of Motoring Writers Breakthrough Blogger in 2015.
Want to buy a classic car but don't have the ready money? There are still financing options available for classic vehicles. Find out what loans you have to choose one and which one will work best for you.
Have bad credit but still need a car? There are a range of lenders that will consider you for a loan. Find out how to apply and how you can get approved in this guide.
Finding the right car loan shouldn't be as hard as finding the right car. Get a loan that will give you pre-approval so you can go shopping with the right amount of funds.
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