Following key government decisions and outcomes of certain events this year may assist new vehicle buyers with planning and budgeting for new car loans in 2023. While the range and standard format of personal car loans and business vehicle finance products are not subject to change, some elements and benefits can.
Interest rates are definitely subject to change as we’ve seen quite dramatically over the past few years. Policy announcements may provide rebates and concessions for say electric vehicle buyers and tax benefits for business buyers. Price changes may affect the finance amount required. Changes in credit scores can affect the interest rate offered on car loans.
When planning ahead, keeping abreast of these announcements might be extremely useful in achieving cheaper car loans.
Reserve Bank Rate Decisions
Interest rates are key to affordability, repayments and the overall cost of car loans. The Reserve Bank of Australia (RBA) makes decisions on interest rates, or more specifically, the official Australian cash rate, at its monthly board meetings.
While lenders determine their own interest rates, RBA rate decisions do tend to impact a large part of the lending sector. The dates to earmark in regard to future rate decisions are the first Tuesdays in each month, except for January.
It is expected that more rate rises will occur in 2023. Applying for car loans and making those purchases prior to any increases, may result in a better interest rate.
Inflation Data
The RBA has been lifting the cash rate to address the soaring inflation rate in Australia. Following what is happening with the data may provide a level of understanding and insight into what might follow in regard to interest rates.
The Australian Bureau of Statistics (ABS) releases the inflation data via posts on ots website. The data has recently been released on a monthly basis but the quarterly figures can be more meaningful as they capture more statistics. The December Quarter CPI figures are due for release on 25 January 2023.
State and Federal Budgets
The Federal Budget for the next financial year is delivered by the Treasurer in May each year. Policies and announcements in the budget usually need to be passed by legislation and often have a lagged timeframe. Some initiatives may come into effect from 1 July while others may be at a later dat.
The significance for car loans could be in regard to any changes to personal income tax and to initiatives for businesses. Decisions which may offer some people an increased take home income which may influence car purchases with finance.
State budgets are also worth staying across, especially for those planning to purchase a green car. Incentives, concessions and rebates may be on the cards in 2023 for EV buyers. These will be state-based decisions so buyers will need to check what may be available in their specific state or territory.
Any cash rebate on a purchase can reduce the amount required for the car loan.
NSW State Election
The NSW State Election will be held on 25 March and similar to the comments re budgets, there could new initiatives for car buyers in policy announcements. NSW did have special offers for EV buyers in 2022 - keep an eye out for what could be available following the election.
Business owners may also benefit from state election outcomes in regard to new work opportunities and/or reduced taxes and other charges. Outcomes which could mean increased income or reduced costs which may affect how a business structures their vehicle finance.
IAWO Deadline
The big date for business vehicle buyers to circle is 30 June as the end to Instant Asset Write-off for the time being. The offer of this temporary tax measure expires on that date but vehicles need to be operating in the business before the date. Speak with us about car loans for sole traders to finance the vehicle purchase.
Tax Time End of the Financial Year
For some taxpayers this time of year can mean a tax refund. Those with existing car loans may choose to use these funds as additional payments on their Secured Car Loan. Extra payments are permitted on this type of finance and allows the loan to be finalised earlier than expected. Minimal payout figures can apply.
New car buyers may use tax refunds as a deposit on a new vehicle to reduce the amount required for their loan. Jade Car Loans does offer no deposit finance where the entire price is included in the loan amount, subject to lender approval. But when a down payment is made, the loan amount is reduced which means – lower monthly repayments.
To work out which way you may like to go – deposit or no deposit, use the Commercial Car Loan Calculator and vary the loan amount. When using a finance calculator some way ahead of loan application and purchase, be mindful that interest rates could change as could the price of new vehicles.
Credit Score
The personal credit score and overall credit profile forms an integral part of the loan application assessment process. The better the score, generally, the cheaper the car loan interest rate offered. Take the time to do an annual credit score check and fix any errors.
Keeping a credit profile in a good place consistently may be extremely beneficial when it comes to applying for car loans.
Vehicle Price Increases
Finally, a key outcome to watch this year will be the prices of new motor vehicles, including those under tesla financing. Due to global inflation, shipping costs, and other issues in manufacturing, many new models are sporting price hikes. This will certainly impact how much is required for car loans and can affect the preferred loan term to achieve the target repayment figure.
There is quite a lot to follow in 2023 when it comes to finance and loans. Stay in touch here for updates as we post new articles regularly on key events that may impact car finance.
Contact Jade Car Loans at 1300 000 003 for quotes on personal car loans and business vehicle finance.
DISCLAIMER: IN REGARD TO 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.
