Is the end of the financial year really a good time to buy?

We’re all about to be bombarded by the ads yelling “Our biggest end of Financial Year Sale, with never to be repeated prices” or words to that effect.  After all, “There’s never been a better time to buy”.

But is that true? Is the End of the Financial Year (EOFY) really the best time to buy a new car, or is this just a marketing myth?

carsales.com.au conducted a quick straw poll to test the water.

BMW Brisbane’s Managing Director, Martin Roller, is one in the affirmative camp. He says the EOFY is the best time to buy;

“The best way to describe it is that the moons align to ensure customers are in a really advantaged position to buy at this time of year,” Roller told carsales.com.au.

“In BMW’s case, we find a lot of the medical fraternity and other professionals are advised by their accountants to purchase a car at this time,” he said.

Interestingly, BMW has a special rebate offer for accountants (and/or CPAs). Being strong influencers, the theory is if the dealers can convince them to buy a car, CPAs may convince their clients to do the same.

According to Roller: “Dealers want to end the financial year and second [calendar year] quarter strongly and are generally more flexible.

“Manufacturers load up their cars with what would normally be cost options at little or no cost to buyers, meaning great deals can be had at this time of year,” he stated.

Hyundai Australia, like the majority of its competitors, puts months of planning into its most aggressive sales campaign of the year. And that is EOFY.

This year the company is advertising offers such as i30 Active at $19,990 drive-away with free auto, or low finance rates and value adds ranging from free CTP to servicing deals.

Giles Belcher, Head of Sales Operations at Hyundai Australia says: “We tend to sell about 20 per cent more in June than the monthly average and this figure is pretty constant from year to year.

“We achieve this by incentivising consumers to move stock, rather than the dealers,” he explains.

Hyundai, like most brands, has sales offers throughout the year, but Belcher admits the EOFY is the one time the whole industry is at its most aggressive. This is good news for buyers who can take advantage of this time of year.

There are also tax advantages at this time of year -- but only for business operators. In recent years, the federal government has introduced the instant asset tax write-off, a means of immediately claiming depreciation for an asset purchased during the same financial year. There have been some updates for the 2020/21 financial year, among those changes an increased cap on passenger-vehicle depreciation, raised from $57,581 to $59,136.

Businesses eligible to take advantage of the instant asset tax write-off during the current financial year are limited to no more than $500 million during the financial year.

Despite most of us not qualifying for these tax concessions, that hasn’t deterred the car makers from tempting us with some mouth-watering offers. With all brands expecting a sales spike at the EOFY, it may just be the best time to buy after all.

This article was originally published on May 27, 2016.