Car Finance has never looked better. A weak market along with the Government’s Instant Asset Write Off scheme for business owners could result in 2020 being the perfect year to buy that new car.
With the economic downturn from COVID-19 leading economists are predicting car dealers will be one of the many industries to suffer. This will give consumers negotiation power to snatch a bargain. The car industry was already declining pre COVID-19. Researchers have reported that new car sales fell by 7.8% in 2019. This decline adds more pressure to dealerships.
The Pros of Car Finance
Most businesses need reliable cars to operate their business successfully. The disposable cash needed for a fleet of vehicles or even one car, is significant for any size business. There are, however, a range of finance options and lenders available through finance brokers to assist with purchasing. With attractive interest rates and the government’s Instant Asset Write Off Scheme, car finance can be a viable consideration. Brisbane Finance Broker, Will Finance has reported that one way of financing a car is through an equipment loan also known as a chattel mortgage. These loans are secured by the asset that is being purchased. They are also often used for plant & operations and equipment purchases.
-Vehicle is owned by the business proprietor or the individual
-$150k Instant Asset Write Off for businesses
-Tax deductions such as depreciation, interest and GST are associated with Chattel Mortgages. (Good tip from Finance Brokers, Will Finance is to always seek accounting advice for any tax benefits from a CPA accountant for your specific business).
-Affordable interest rates
-Rates are always fixed so this assists business with budgeting and minimises hidden costs
Cons of Car Finance
-Termination fee is applicable if loan is paid out early
-Repossession of vehicle if payments are not met
Should you buy new or used car?
Each lending purpose is unique to your financial position, goals and requirements. However, the banks perceive purchasing a brand-new car from a dealer has a lower risk then a used car purchased from a private sale.
Finance brokers inform us that lenders classify new vehicles from dealers as lower risk because:
-Asset is new and should be in perfect condition
-Warranty is usually associated with brand-new cars purchased from dealers
-Lower maintenance expenses
-Often lucrative depreciation advantages
-Improved fuel efficiency. Every year car makers aim to improve fuel efficiency. This can translate to significant fuel savings for car owners.
With the tax benefits and the recent Instant Asset Write Off, car finance is often a smarter option. Specialist finance brokers, Will Finance, have the expertise to source the most beneficial car finance for your specific requirements. They Will Finance the most cost effective and efficient lending solution for your car purchase.