Edition 1, 2005 - New Car Tariff Reductions

stratton - 'FOCUS' Newsletter - Edition 1, 2005
 

Finance Focus 1 # 2005

New car tariff reductions.

Finance Focus 1 # 2005

On January 1st 2005 new car import tariffs were cut by 5%, so it’s never been a better time to buy a new car.

Most manufacture's are passing on this price reduction to the customer; the ones who aren’t will certainly not be increasing the Recommended Retail Prices (RRP) of their products in 2005.

Competition between manufacture's is fierce - Most have announced that they are passing on the full 5% reduction to customers. Many other manufacturers will be bonusing vehicles (giving the dealer more margin) so the dealers will be able to pay you more for your trade in.

If the manufacturer of your choice is not discounting the car you want, its probably because they don’t want to de-value the marque by publicly reducing prices, but they may be doing deals behind the scenes. We seem set for yet another record year of new car sales, as Australia still has one of the oldest average vehicle age's in the western world.

Also interest rates are still at a 30 year low! But they are on the move upward, our rates are fixed, so you know where you stand for up to 5 years.

How to purchase and finance the car you want?

Avoid finance deals that sound cheap. Some manufacturer's subsidise the interest rates with margin from the car (this is called subvention). This means that you pay too much for the car (sticker price) on an artificially low interest rate. Lets explore some of the hidden traps.

  1. Your residual (balloon) value is higher than it would be if you just negotiated the best price and sourced the finance yourself.
  2. The finance product will almost without exception have severe penalties for early payout, which could cost you a considerable amount.
  3. You are borrowing more, so whatever the rate you are still worse off.

Don’t shop for finance on rate alone. It is all too easy to be told what you want to hear. Remember structure and termination penalties are far more important in the long run. Couple these factors together and the great deal you thought you had is nothing like it at all.

Always keep the vehicle purchase and finance separate, the dealer will always push you to finance with them. Most dealers only have one finance product and it is the product of the bank or finance company that lent them the money to buy the dealership and fund the stock. It is often by no means the best product for the customer - beware!

Ask about payout penalties (get it in writing), check for ongoing monthly account fees, statement fees, high establishment fees, direct debit fees and the cost of GAP insurance.

stratton has none of these fees on our premium products; we can also give you a choice of lenders including the world’s premier finance companies.

We are here to provide you with the finance you need, and we are totally independent. We will assist you not only in your next purchase, but with every vehicle you ever buy in the future whatever the make!

All with the same premium product and with the same sound advice, service and piece of mind.

Regards

stratton

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Stratton Finance Pty Ltd
stratton.com

T: 1300 STRATTON
(1300 787 288)

 

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