The first half of 2020 has been a challenge that Australian businesses certainly could have done without. Bushfires, extreme rain events and then coronavirus all impacted the economy as a whole and individual businesses to varying extents.
But there are always differing views on challenging circumstances – are they problems or opportunities? Will the coronavirus recovery be a snapback V, a stop-start W or will the economy struggle to ‘get out of the bathtub’ with a U-shaped return? What will the impact be on economic growth? How will it affect my business?
Usually, a mid-year business wrap would be framed around the Federal Budget. But with that pushback to October, we’re covering some of the issues and opportunities you may have missed over the past few months.
Within the post-COVID-19 scenario, we’ve compiled a selection of updates, opportunities and offers that may assist with your business car purchasing decisions.
The downside: recession, record unemployment figures, global trade considerations, risk of a second wave of coronavirus.
The upside: record low interest rates, COVID-19 government support measures, rising consumer confidence, new business opportunities.
Business Support
JobKeeper, JobSeeker and the SME cash payment stimulus measures have been greatly welcomed and assisted many businesses deal with the effects of the coronavirus crisis. As the deadline for some of these measures - 30 September 2020 - approaches, all eyes and ears await the Government’s decision around the future of these programs and if the economy will avoid a ‘fiscal cliff’.
The Instant Asset Write Off (IAWO) has been extended to 31 December 2020 and this may be the incentive you need to move on with your business investment plans and purchase business vehicles. We’ve covered IAWO in great detail in a number of articles. Refer to our blog article resources for the details or give us a call on 1300 000 003 to discuss.
In June, the Government announce the JobMaker program which may present opportunities if you’re in the building and construction sector. That sector in conjunction with infrastructure projects have been flagged as key priorities by Federal and State governments.
Good news for many tradies – could be the right time to invest in a new vehicle.
Economic Conditions
Australia is facing a future possible recession but how long and how severe it will be is unknown. We stay across the economic analysis and come to the conclusion that there are mixed forecasts and opinion.
Here’s a few points of interest for you to catch up and hopefully grasp an overview of what’s happening:-
- As part of the initial coronavirus stimulus measures, the Reserve Bank reduced the official cash rate and expanded its balance sheet by buying up Government bonds. Known as ‘money printing’ and ‘quantitative easing’, this monetary policy measure is complex but the bottom line is: it enables banks and other lenders to access their funds more cheaply and therefore allows borrowers such as your business, better access to low interest rate finance. This is meant to incentivise investment.
- For those seeking cost effective commercial vehicle finance, the lenders should theoretically, be in a good place to extend loans.
- Interest rates are at historic low levels and not expected to go lower. RBA Governor Philip Lowe said that he did not intend to decrease the official rate into negative territory.
- So while rates are low, it’s looking good for those seeking cheap car loans.
- While unemployment rose again in May, not surprisingly to levels not experienced for a very long time, the real picture of where the jobs market is probably won’t be clearly evident until the JobKeeper program ends at the end of September. Of course all are hoping for a good business recovery by then, but with international borders expected to be closed ‘for some time to come’, some sectors are in for long-term pain.
- On the topic of jobs – have you considered a Novated Car Lease with Salary Sacrifice for your employees? This type of finance offers benefits to both the business and the employee and may be a useful resource for retaining or attracting good team members in a challenging jobs market. For details on how a Novated Car Lease could work for your car purchase give us a call to discuss 1300 000 003 or head to our dedicated web page for more information.
- On the good news side of the outlook balance sheet – after a record drop in April 2020 during the lockdown, consumer confidence was back on the rise for May and June as businesses began to reopen.
Car Market Review
- There are plenty of new models due for 2020 release in all categories – passenger vehicles, luxury market, work vehicles, utes and light commercials.
- New car dealers will be very keen to sell after slow sales due to COVID-19 issues. Add to that EOFY offers, clearance and plate sales and mid-year is always a great time to buy a new vehicle.
- Catching our eye on the new releases especially is the 2020 model of the Toyota HiLux Workmate. A solid vehicle for tradies, couriers, farmers and plenty of other hardworking operators.
- In the luxury business vehicle stakes, Audi have signalled 2020 releases across several of their model ranges.
- For those thinking of the environment, there is news worth noting in the electric vehicle market. Several manufacturers are active in the EV market and that now includes Porsche with their 2020 Taycan – the German manufacturer’s first EV.
Jade Car Loans offers cheap car finance for all types of vehicles - petrol, diesel, electric and hybrid models for both business and private buyers, so call us for a quote.
The Lending Scene
We operated ‘business as usual’ throughout the crisis but did note issues with lenders in the early stages as they responded to calls for payment deferrals and other issues related to hire purchase cars. But the situation has improved and many of the vast number of banks and lenders that we are accredited with are offering great deals on motor vehicle finance.
We’re being positive and our consultants continue to work hard to secure our customers the cheapest car finance deals, including competitive business car loan rates, available.
While some businesses, including those looking for a sole trader car loan, may be holding back and taking the cautious approach, many others are acting on their investment and motor vehicle purchase plans to move their business forward and capture the best of the offers and opportunities available.
To get moving on sourcing the most cost-effective motor vehicle finance deal for your business, contact Jade Car Loans. Call 1300 000 003
DISCLAIMER: THIS INFORMATION HAS BEEN PROVIDED AS GENERAL MATERIAL FOR YOUR CONSIDERATION. INFORMATION IN REGARD TO GOVERNMENT POLICIES IS SOURCED FROM OFFICIAL AUSTRALIAN GOVERNMENT SOURCES. NO LIABILITY IS ACCEPTED FOR ERRORS IN PRESENTATION OR IN THE INTERPRETATION OF FACTS OR THE COMMENTARY AND ANALYSIS OF INFORMATION WHICH IS AVAILABLE IN THE PUBLIC DOMAIN. INDIVIDUALS ARE ADVISED TO CONSULT WITH THEIR FINANCIAL ADVISOR OR ACCOUNTANT FOR SPECIFIC ADVICE REGARDING THEIR INDIVIDUAL SITUATION.
