EOFY… Big Deal? Or Much Ado About Very Little?

Finance

May 26

Quick, everyone – June 30 is coming. Buy a car… spend money… it’s tax time, you’ll get it back!

These are the kinds of things that everyone is plastering all over their social sites, billboards and letting you know in any way they can right now. Sounds great, right?

The question to ask yourself is, “Is it really beneficial to me to spend money right now?”

Companies in every industry are using the end of financial year (let’s call it EOFY to minimise typing) as a perfect marketing ploy. It can be a very good time of year to claim back expenses (assuming you are fast at finalising your taxes) because it all has the potential of being claimed/deducted and reimbursed very quickly.

But the most important thing here is to not have your blinkers on regarding ‘Just how much can be claimed’. The first item you still should be concerned with is, ‘Can my cash flow afford the new purchase?’ If it can, work out your budget and stick to it. In my experience, treating the tax benefit as an added bonus is a far more prudent way of doing business at this time of year!

Are car prices in June really as good as you’re led to believe?

The truth is, probably not. At any point in the year, dealerships have a margin in their sales and whether this is mass-marketed to you as an EOFY sale, or whether you approach our team and we guide you through one of our preferred dealer groups, the potential pricing is very similar year-round. Sure, dealers have certain ‘corporate bonuses’ on certain ranges and configurations. But again, this isn’t limited to the month of June.

What about interest rates in June?

Again, you will probably be seeing some ‘smoke and mirror’ finance packages around this time of year, all wonderfully marketed to make you think you can afford that lovely, shiny four-wheeled stallion. But, when it comes down to genuine underlying rates, they will (mostly) remain the same in July. 

Another benefit of using our finance broker service is that you will then have visibility across all lenders. This means that, if Westpac (for example) has a great special, you will have access to this, as opposed to the limitations of going through a dealership with a relationship with only one or two lenders.

The best advice I can give you at this crazy, discount-oriented, pressure-purchasing time of year, is to take a step back. Calm down and gather information – this is imperative at a time when sales teams are pulling at your emotional heartstrings at every corner!  A large proportion of my phone calls at this time of year is from clients who are being emotionally driven into what may be incorrect decisions. They all know that I’m more than happy to bring them back to reality and say, ‘no’ if it does seem like it’ll stretch their cash-flow, or if the purchase isn’t quite as good as they’re led to believe. Everyone needs a sounding board at a time like this. Let me know your thoughts and I’ll help in any way I can.

LM

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