Our advice to those thinking of buying a new car this End of Financial Year (EOFY) is, don’t expect to bag a bargain because dealers simply don’t have the stock to do any discounting. And with used vehicle prices holding strong there is little chance of a bargain here either.
The irony is, during pre-pandemic the car industry experienced over 30 months of sales decline, hitting the retail industry hard. April 2021 saw a record sales month of 92,347 vehicles sold, an increase of 132% over the previous year. Dealers say they could have sold more if they had the stock.
Shifting your intention into a purchase in the second half of 2021 into 2022 and you’ll need to start your discussions now with dealers in terms of what you want and how long away it is. There was a time 3 to 5 years ago when you could walk into a volume brand dealer, do a deal on a Saturday and drive it away early in the week. Not now.
Manufacturers are now back-peddling to source semiconductors (microchips) for new vehicles given they cancelled orders during the reduced demand in the COVID downturn. Those microchips instead went into laptops, gaming consoles and televisions.
Not only is there limited supply, but you the consumer now have limited bargaining power as a result. Now you have no choice but to join the queue and place an order on a model in demand or go to the back of the queue. Especially for models like the Toyota RAV4 Hybrid.
According to Dealer Finance Group broker, Kenny Nguyen, “The Dealer firmly holds the cards in negotiations at the moment. Bumper sales and limited stock means the buyer needs to be on their A-game to do a deal. The few thousand you could have bargained off a new or used car a few years ago simply isn’t there anymore. Think about your trade-in. The dealers are desperate for stock, so if the dealer is asking more for their car, perhaps you should ask more for yours too.”
“You need to get the buying intention, timing and supply mix right. But you also need to navigate where you are with a current finance contract and how supply may impact on your next vehicle and getting the timing right on finance and purchase/delivery,” Kenny emphasised.
Should your really need to buy this EOFY, be smart and find out what is in stock now and deliverable before the end of June.
Talk to the team at Dealer Finance Group for more information on the current market and opportunities within our dealer network.
