How to buy a new vehicle in this booming market
Last month was the biggest July in the history of new vehicle sales, according to the Federal Chamber of Automotive Industries (FCAI).
Australians took delivery of 96,859 new vehicles, which beat the previous July record (92,754), set in 2017, by 4.4%.
FCAI Chief Executive Tony Weber attributed the record result to an ongoing increase in supply, following the plant shutdowns, microprocessor shortages, shipping problems and logistics bottlenecks that occurred during the pandemic.
“During the past 12 months the issue has been one of securing supply for consumers, however as these pressures ease, we are starting to see a return to more stable market conditions,” he said.
“Many of these vehicles were ordered several months ago, so it is important to monitor the broader economic conditions through 2023 and their impact on private and business demand.”
The top-selling vehicles in July were the Ford Ranger (5,143 sales), Toyota Hi-Lux (4,670), MG ZS (3,852), Tesla Model Y (3,330) and Toyota RAV4 (2,750).
Four different ways to buy a new vehicle
At this time of year, some Australians use their tax refund to help them purchase a vehicle.
If you’re thinking about getting a new set of wheels, you might have more options than you realise. They include:
Standard car loan
This involves buying the vehicle, by putting down a deposit of 10-20% and borrowing the rest.
A lot of car loans include a balloon option, which allows you to reduce your monthly repayments in exchange for making a one-off ‘balloon’ payment at the end of the loan term. Generally, a balloon loan costs more over the life of the loan than a standard loan.
You don’t have to buy a vehicle; you can lease instead. With a lease, you make monthly payments for a certain period of time; at the end of that term, you can either buy the car or return it.
With a novated lease, your employer leases the vehicle from a vehicle supplier, hands it to you and deducts the costs from your pre-tax salary.
Contact me if you’re planning to acquire a new vehicle. If you’re unsure whether to buy or lease, I’ll be happy to explain your options to you.