Finance Forecast - April 2009
The first Roy Morgan Automotive Leading Indicator for 2009 showed that the number of people 18 years or older who intend to buy a new car in the next 12 months has increased significantly, up to 620,000 from December 2008's low of 486,000. Thanks to the Federal Government's stimulus package, several consecutive rate cuts and the price pressure resulting from reduced new car sales in recent months, it's definitely a buyers market. While official interest rates remained unchanged at the RBA's last meeting, analysts continue to speculate on the likelihood of a further cut next time around. Whatever the RBA decides, the expected impact of school holidays, Anzac Day and the Easter holiday in the next month, means that car buyers will be in a good position to bargain in April.
In recent news we covered the main points of the Federal Government's Temporary Investment Allowance, which provides increased tax breaks for small and general business asset investment as part of the economic stimulus package. This tax break applies to most new cars and demonstrator vehicles, as well as other new, depreciating business assets. To receive the maximum 30 per cent additional deduction from this allowance, installation of equipment or delivery of vehicles must be complete by the end of June 2010. We've put together some Frequently Asked Questions about the Temporary Investment Allowance tax breaks which can be found here.
New car buyers intending to take advantage of the special tax breaks would be wise to get in early. Prices are at rock bottom. The extensive range of options and sheer numbers of vehicles carried by dealers are almost certainly a thing of the past. Expect a reasonable wait on new car delivery. The business tax breaks also apply to other new, tangible, depreciating assets including many items of business plant and equipment. If you're considering additional equipment for your business, it might be worth taking a closer look at this temporary incentive. While there has been some discussion about the lack of funding for businesses - particularly small businesses - in the media recently, established businesses of any size with appropriate investment plans are still able to secure finance for vehicles, machinery and other equipment.
In an economic downturn, most people look to reduce their spending in some areas. Peace of mind and insurance is not one of them. In fact, in times of recession (not just this one), insurance is an area where we tend to increase our spend - preferring the certainty of a known premium to the potential stress and financial pain of a sizeable, unexpected bill. If you haven't already, you may wish to review your own insurance cover - not just home & contents and health care, but also loan protection, extended warranty cover and your business insurances.
Whilst the current economic climate presents significant challenges for many of us, there may be an opportunity for you to save money, reduce stress or make a smart purchase decision.
Find out more about car finance or equipment finance to help you take advantage of the government investment allowance. Try our repayments calculator, get a quick car finance quote, or secure a car finance pre-approval online - be prepared to buy smart. For more information on finance, or assistance finding your preferred vehicle at the right price, call us on 1300 STRATTON (1300 787 288) or contact your finance consultant directly.