When heading into the market to select a new vehicle, buyers are spoilt for choice across all prices and categories. Some decisions are made on a very personal basis some on a very cost-conscious basis. For some, it’s heart overhead, for others, head over heart. Prestige or practicality? Budget or luxury?
With most car owners only purchasing a new vehicle every 4 or 5 or so years, buyers in today’s market need to adjust their thinking to the current lending environment. Not the interest rates and lending climate of several years ago when you last purchased a new vehicle. The finance scene has changed over the past few years, especially regarding interest rates and your aspirational vehicle may now be a frontrunner in the affordability stakes.
In the cab chassis ute market, buyers could be tossing up between a budget buy from the GWM range or going for a top of the range Ranger or even a RAM. Light commercial vans are workhorses and must deliver (excuse the pun) both for customers and business cash flow. Ford Transit, Toyota Hiace and Mercedes-Benz Vito are highly-regarded by buyers, Does the cheaper price tag of say the LDV range still make dollar sense? With low-interest rates and tax benefits on commercial finance on offer, your business may now be in a position to up the ante to a top of the price range delivery van.
The SUV market is particularly strong with MG’s small compact impressing in sales figures. But the luxury market including Audi, BMW and Mercedes Benz beckons. In the highly competitive mid-range, the top-selling Toyota RAV4 is there for consideration along with the impressive offerings from Mazda. With passenger vehicles, the range is always extensive but Kia and Hyundai are giving buyers a reason to re-consider that luxury sedan and Mazda is moving up in the sales figures, reflecting buyer popularity. But will that more luxurious model or possibly that sports coupe you’ve always wanted win out with our cheap interest rate finance deals?
The take-up of EVs in Australia has been well-documented as slow for a range of reasons. But the price is probably one of the big turn-offs for the pragmatic Australian buyer. Could now be the time to consider that more expensive price tag and finally make that environmentally-conscious decision to go electric?
Buying decisions are based very much, for many buyers, on price. Or more specifically, the more relevant finance repayments. We outline the reasons why now could be the time for you to upgrade to that higher-priced, better or more luxurious make or model.
The Lure of Low-Interest Rates
If you’re basing your current thinking about a new car purchase on what the repayments cost on your current vehicle in a similar category or price range several years ago, you are likely to be very pleasantly surprised. Interest rates have been cut significantly recently and the official cash rate is currently at historic low levels.
The cash rate is set by the RBA and is the basis for banks and lenders to set their lending rates across their markets. Lending rates in many sectors are currently at low levels compared with several years ago. A low-interest rate climate is enticing buyers into the car market, especially the high sales figures.
We’ve made it easy for buyers to see the current interest rates on motor vehicle finance. Private buyers can refer to our Lender Interest Rates Tool to see what interest rate we are currently achieving on Secured Car Loans alongside a selection of banks and other lenders.
Business buyers can refer to our Business Car Loan Interest Rates Tool to see our finance on the range of lending products – Chattel Mortgage, CHP and Leasing.
When utilising our business car finance repayment calculator, simply enter the price of the vehicle you’re considering or the loan amount you are seeking and your preferred loan term and the calculator will display an estimated repayment amount. How does that compare with what you paid or are paying in repayments on your current vehicle finance arranged a few years ago? Surprised?
Now input the price of the more expensive make or model you would like to buy. Now you can easily see the difference in repayments to compare different makes and models.
These loan tools put into perspective the key buying driver for many buyers – affordability in terms of car loan repayments. A factor is more relevant to many buyers than the actual price tag.
The Assurance of Fixed Interest Rates
A big issue that is worth resolving in this conversation is around fixed interest rates. Sure, our motor vehicle finance interest rates are exceptionally low right now, but what could happen in a few years? Car loans can extend over 4, 5 or 6-year loan terms, What then of the loan repayments on your higher-priced vehicle?
The RBA has repeatedly stated that the Board does not see the official cash rate being increased until 2024 though some analysts are predicting it may be more like 2023. However, the conversation about what may happen with interest rates in a few years is primarily associated with home loans. With home mortgages, the fixed interest rate period is only for a few years of what could be a 20-25 year mortgage. So buyers taking on a mortgage in 2021 would be keenly interested in what could happen in 5 or so years.
The situation with car loans is different. At Jade Car Loans we offer fixed car loan interest rates across all our lending products. That rate is then fixed for the entire loan term. The fixed repayments arranged now will remain the same regardless of what might happen with the official cash rate or any other interest rates in 1, 2,3 or 5 years from now. You have the assurance that if you do upgrade to a better make or model now, the repayments on that loan will remain fixed over the fixed loan term.
Additional Benefits
In addition to the lure of low interest rates, business buyers have the additional appeal of the current tax benefits on offer with temporary full expensing and loss carryback.
This could be the year that you do get that vehicle you want rather than the one you’ve had to settle for in the past, due to price. The current low-interest rate climate, combined with options for ABN car finance and our own cheaper interest rate deals, are making the impossible a real possibility for upgrading to a ‘better’ make or model vehicle.
Contact 1300 000 003 for a finance quote on the vehicle you want.
DISCLAIMER: REGARDING MISREPRESENTATIONS AND ERRORS CONTAINED IN THE MATERIAL AS PRESENTED, LIABILITY IS NOT ACCEPTED. THE DETAILS AND CONTENT IS PROVIDED FOR CAR BUYERS AND INDIVIDUALS AND BUSINESS SEEKING FINANCE PURELY AS GENERAL INFORMATION. THIS IS NOT PROVIDED AS THE ONLY SOURCE OF FINANCIAL INFORMATION. ANYONE THAT CONSIDERS THAT NEED FINANCIAL ADVICE ABOUT THEIR SPECIFIC REQUIREMENTS SHOULD SEEK THEIR OWN FINANCIAL ADVISOR.
