Wheelin’ and dealin’: How to land a bargain auto this EOFY
- 1.6 million Aussies plan on buying a car in the next year
- New car sales have slowed down
- Five tips to bargain for a better deal during EOFY
20 June, 2019, Sydney, Australia - More than a million Australians plan to buy a car in the next year according to Finder, Australia's most visited comparison site.
Despite somewhat depressed new car buying figures from FCAI1, a Finder survey of 2,034 Aussies shows that 1.6 million (8%) plan on purchasing a car in the next 12 months.
Taylor Blackburn, money specialist from Finder, said special deals always pop up during end of financial year (EOFY), as car dealers look to clear old models and meet yearly sales targets.
"Some dealers are offering $1,000 off the drive-away prices of certain vehicles or throwing in free on-road costs or $2,000 in accessories, and that's before you even start bargaining.
"The lull in car sales this past year truly puts the buyer in the driver seat when it comes to getting a deal," Blackburn said.
A Finder survey of 1,319 Australians who plan to buy a car in the future found that while the majority (57%) plan on purchasing their next car using savings, a quarter (24%) will use a car or personal loan to pay for their new car.
Blackburn said the findings were indicative of the tighter lending environment.
"Off the back of the Royal Commission not only are lenders becoming more restrictive with who they approve for loans, but Australians are also becoming more savvy when it comes to using finance to purchase a car."
Worryingly, 8% are planning on using dealer finance, and 4% will buy a car using a credit card.
He warned that Australians should weigh all their financing choices before signing on the dotted line at the dealership or risk paying thousands in extra interest.
"If you are going to borrow money to buy a car, make sure you compare your options online.
"Don't just take go with dealer financing because it is convenient or the rate looks great at a glance," he said.
Finder reviewed current EOFY dealer finance offers and found that some are offering 1% interest comparison rates but buyers could be stuck with a big bill at the end of the loan, potentially worth tens of thousands of dollars.
"Dealer finance offers may seem tempting, but check the fine print. You may end up paying more than half of the car's value at the end of the term if the deal has a balloon payment," he said.
Blackburn said buyers also need to consider the cost of insurance when they are picking out a new set of wheels.
"It's easy to get caught up in the excitement of driving away in a new car and forget about protecting it.
"A Finder analysis revealed the difference between insurance policies for the exact same standard car could be up to $700 per year. Even on a bad day that's a return ticket to Bali," he said.
For more information check out Finder's EOFY Car Buying Guide.
Top car loans monitored by Finder
Car loans for a $40,000 vehicle and monthly repayments over 5 years
|Car Loan||Interest rate||Loan term||Application fee||Monthly repayment over 5 years|
|Loans.com.au||From 4.99% fixed||3 to 5 years||$400||$762.21|
|Credit Concierge Car Loan||From 4.99% fixed||1 to 7 years||$350||$766.27|
|Beyond Bank Low Rate Car Loan "Special Offer"||From 5.69% fixed||1 to 7 years||$175||$770.92|
|Stratton Finance New Car Loan||From 5.34% fixed||1 to 7 years||$459.20 (for private seller vehicles this fee is $608)||$778.73|
|RACV New Car Loans||From 5.99% fixed||1 to 7 years||$399||$780.84|
Source: Finder as of 19 June 2019
1 New vehicle sales in May 2019 was 436,649, down from 475,222 for the same period in 2018 https://www.fcai.com.au/news/index/index/year/all/month/all/article/570
Five tips to bargain for a better deal during EOFY
- Pick and choose features. Extra features can raise retail price significantly, so you can ask for certain features you may not need to be dropped in an effort to bring the cost of the car down.
- Shop around and ask if they price match. Don't put all your eggs in one basket when it comes to where you buy. Seeing what a variety of dealers can offer you can save you a bundle.
- Don't be rushed. Although technically the financial year ends on June 30, there is no magic bell that means the dealer can't offer you the same deal if you weren't ready to buy. Don't be pressured to sign on the dotted line because you think time is running out.
- If you don't ask, you don't get. Remember, car dealers have financial targets they need to meet, and they want to make the sale. So don't be afraid to haggle. Aside from price, this can be things like accessories, maintenance and warranties.
- Be ready to walk away. Chances are that the car dealership wants the sale more than you need the purchase, so be prepared to walk away and put the pressure back on the dealer.
For further information
The information in this release is accurate as of the date published, but rates, fees and other product features may have changed. Please see updated product information on finder.com.au's review pages for the current correct values.
Every month 2.2 million unique visitors turn to Finder to save money and time, and to make important life choices. We compare virtually everything from credit cards, phone plans, health insurance, travel deals and much more.
Our free service is 100% independently-owned by two Australians: Fred Schebesta and Frank Restuccia. Since launching in 2006, Finder has helped Aussies find what they need from 1,800+ brands across 100+ categories.
We continue to expand and launch around the globe, and now operate in the United States and the United Kingdom. For further information visit www.finder.com.au.