One of the big issues in the motor vehicle industry over the past year has been the supply chain which means availability of stock for immediate delivery. The new vehicle stock issues stemmed from the pandemic which slowed production lines in international manufacturing facilities. Then came the global shortage of semiconductors. This has plagued the production of many goods and at this point continues to cause major hold-ups in the supply chain for motor vehicles. Now news has it that a shortage of magnesium is posing a potential risk to supply chains.
Australian buyers are used to showing up at a new car showroom, going for a test drive, paying a holding deposit and taking delivery of their new car a few days later. The current stock situation requires buyers to be either patient or rethink the car buying process to overcome the ongoing and emerging new vehicle stock issues.
Many dealers and manufacturers are advising buyers of popular models to place an order for and simply join the queue. This can be frustrating as it coincides with a great time to buy a new vehicle. Interest rates are at historic lows and many business owners are looking to not only capitalise on the low interest rates but also take advantage of the tax benefits on offer with temporary full expensing and IAWO.
While we, along with the motor vehicle industry experts, don’t have a clear-cut solution to this dilemma, we can offer some suggestions and direction on how to get behind the wheel of a new vehicle as quickly as possible.
A Few Suggestions
While the supply chain issues are very real, especially for the more popular models, there are cars available in local dealerships. It may just take a bit more time than usual to source and a bit more open-mindedness on the part of the buyer.
- Consider a less popular model: If you need or want that new vehicle NOW then give more thought as to why the models available are tagged as ‘less popular’. It could be for quite insignificant reasons such as trends and a great ad campaign.
- Do your research: It may take a bit of time but if you want a new vehicle ASAP, you may have to put in the hard yards to find it. Online resources offer a platform to see a wide range of new vehicles in one place and often post articles on what is available right now. Phone around dealerships before heading there in person.
- Consider engaging a car buying broker: If you don’t have the time or patience to do the sourcing, consider using a buying service. These professionals have their finger on the pulse of the market and connections and may be extremely helpful. They will often negotiate the purchase price for buyers as well as sourcing vehicles.
- Don’t be so particular when it comes to colour: Many makes have a fairly standard set of colours but some do offer a range. The less popular ones sell more slowly and could be waiting to be purchased.
- Be open-minded: This is a personal matter but if you usually have your heart and mind set on a particular make and model, possibly try to be more open-minded and consider a wider range of vehicles. You may be surprised with what is available in your price/category range.
With supplies of some brand new cars restrained, many appear to be turning to the used car market. The price of used cars has spiked in recent times. Buying used rather than new may allow you to acquire you’re car faster but there are some considerations especially weighing up the pros and cons.
While we offer the same range of loan products for used and new vehicles, the loan offer may vary for used vehicles. The age and condition will be taken into account by the lender when making a loan offer. The ‘considerations’ that may be expected may include the lender requesting the borrower to reduce the overall loan amount; offering a shorter repayment period than requested to ensure the amount owed at the end of the term does not exceed the vehicle’s value; and possibly a higher interest rate. Your Jade consultant will handle these negotiations with our lenders on your behalf but their worth being aware of.
The value of the vehicle at the end of the finance term or when re-selling should be kept in mind. You don’t want to owe more than it’s worth when you come to selling or trading in. Serious consideration of the purchase price and comparing it with market value in previous periods could be worthwhile.
Many good quality cars can be found at auctions. Rental car companies and governments regularly turn over their stock and offer their fleet vehicles for sale. These may be basic models in terms of add-on extras and the colours may be a little stock-standard. But usually, the vehicles have been well-maintained and presented in good condition.
Pre-Approved Car Finance
If buying at auction it is highly advisable to have your no doc car loan finance secured before attending. Given the current supply situation, pre-approved finance can be highly advisable for all purchases. It allows buyers to commit as soon as they source the vehicle they want that is available and avoid being gazumped by another buyer while they go off to find a loan.
We offer pre-approved loans across our complete portfolio of private car loans and business vehicle finance. The same interest rates apply to both pre-approved and post-purchase loans so there is no premium cost for this service.
The process is similar to that when you find the car first and then apply for a low doc car loan. The application for car finance is made based on an estimate of the loan amount and make/model. The specific details are finalised when the purchase is made.
Pre-approved car loans are extremely popular and can be a great assistance for buyers in a competitive buying market. To discuss how we can assist you in expediting your car purchase, have an obligation-free discussion with one of our Jade Car Loans consultants.
Contact Jade Car Loans at 1300 000 003 for a car finance quote and a pre-approved car loan
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.