What you should know about car finance

Posted by ryan.ewart in Asset Finance, Car Finance

New car smell. We all love it. And for good reason. A new car is exciting. Its shiny, it goes vroom and it smells nice. Australians love their cars and this time of year is one of the busiest car buying times as many take advantage of end of financial year sales and model run outs.

What is surprising though is how many people start shopping around for a new car without having their car finance sorted. 

You’ve done a bit of online research, you’ve narrowed down your selection and you head out to the dealership to have a ‘look’….next thing you know, the car salesman has signed you up for a five or seven year loan (with a few additional extras thrown in) with the dealers finance provider. 

How do you know whether you get the best rate or deal on that car loan? 

There are a few things that you need to keep in mind when it comes to your car and car loan. It’s worth shopping around, not just for the right deal on the car, but also for the right loan.

Dealer finance – it’s not always the best deal

Before you think about taking up an offer of finance from a dealer, make sure you ask lots of questions. A very low rate can come with serious strings attached. Typically you have less room to negotiate which could mean you are paying thousands of dollars extra for your car. Dealer finance can be very restrictive and not as flexible as other car finance options out there.

Just as importantly, dealer finance can come with a whole host of additional costs which can bump up the cost of car finance. Be sure to ask if there is residual value or balloon payment, which is a lump sum due at the end of the contract term, which can be expressed in dollars or a percentage of the car’s initial sale price. Make sure you clearly read the paperwork and fine print before you buy your car, and don’t sign the paperwork on the same day. 

0% p.a. interest car finance

Another common car loan offer from car dealers is the offer of 0% p.a. interest car loan from your dealer. While there’s no denying that sounds like a great deal, there are some things you need to know before signing up.

While the loan is being advertised as 0% p.a. interest car finance deal, the price of the car you’re looking at may have been raised to compensate for the low rate, and further negotiating the car price with a dealer may be out of the question. These offers are usually only valid for certain car models, so if you have your heart set on a particular model, you may have to compromise to take up the 0% interest offer.

It’s also important to look out for additional clauses in the contract, such as having to have  the car serviced at the dealer, which may mean paying higher service prices than you would at your local mechanic. You should also check any warranties and insurances included in the contract, and make sure you are only paying for what you need.

Get pre-approval for your car loan

In most cases, the safest way to finance a car is to have a car loan pre-approval before searching for the car. It’s not the most exciting part of buying a new car, but it can save you thousands in the long run.

Having your pre-approved loan and budget in mind before starting your car search will allow you to focus on finding the right car and the best deal, and room to negotiate with the seller knowing exactly how much you can spend.

Do your homework

The key when finding the right car finance for your new car is homework. Make sure you read the fine print and shop around for the deal that’s right for you. And definitely don’t choose on rate alone – often a low rate can hide other surprises, so make sure you know what you’re paying for in the long run.

Let us help find you the best car loan

We have over 20 car loan lenders, all of which are competing for your car loan and will offer some great rates and features. We can find out what you need from your car loan, then search through hundreds of car loans to find you the right one, at a great rate.

Grow your business today

Posted by ryan.ewart in Accounting, Asset Finance, Business Finance, Financial Planning, Small Business

Are you planning on growing your business this year?

Growing your business can be an exciting yet daunting task. As a small business, we understand. It comes with a risk, but the reward for success is so sweet.

We hear from many of our clients that a challenge they face in growing their businesses is having access to sufficient funds and resources to facilitate that growth.

It may be your need a bigger van for deliveries, more tools and machinery to be able to take on more clients, a bigger coffee machine for the extra customers coming through your door, a new computer, chair and desk for your new hires or just a better photocopier for the team.

Using EOFY to your advantage

The good news is that you can use the EOFY to your advantage with the newly upgraded instant asset write-off.

The instant asset write-off has been with us for a few years now, and in a post-budget blitz, the scheme’s upper limit has been extended to $30,000, up from $25,000.

Even better, the write-off has also been extended to medium-sized businesses with a turnover of less than $50 million

The beauty of the scheme is that it allows small (and now medium-sized) businesses to claim an immediate tax deduction for eligible asset purchases rather than having to depreciate the cost over several years. This delivers immediate tax savings that can make an asset purchase more manageable on business cashflow.

What type of assets can be written off?

Most types of plant and equipment used in your business can be eligible for the instant tax write off. A new printer, a cappuccino machine, a tradie’s ute or a hairdresser’s reception desk are just some of the assets that can be claimed.

What’s the write-off worth?

This year sees three thresholds apply to the instant write-off depending on when you purchased a business asset.

The upper limits are:

  • $20,000 for assets purchased between 1 July 2018 and 28 January 2019
  • $25,000 for assets purchased between 29 January 2019 and before 7.30 pm 2 April 2019
  • $30,000 for assets purchased between 30pm 2 April 2019 and 30 June 2020.

A key point is that the entire cost of the asset must be below the instant asset write-off threshold irrespective of any trade-in amount. So, if you buy a delivery van priced at say $40,000, it won’t be eligible for the write-off even if you pay $25,000 after trading in your current vehicle for $15,000. The van would have to be priced below $30,000 before any trade-in applies for it to be eligible for the write-off.

As your local Sydney small business experts, we can help businesses with any commercial loans and business finance needs.

When you’re in business, having the right finance and risk planning in place can mean the difference between thriving and surviving. As a local small business ourselves, we understand your needs. We can help you understand the finance options available and do all the legwork in sourcing the right business loan for your needs.

And no one is better placed to understand your needs than another small business owner.

Make an appointment to speak to your local small business finance expert who can answer your questions and help you find a suitable financial solution for your business’ current and future growth needs.