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Why EOFY is a good time to buy a new car

By Jez Spinks, 11 May 2019 Car Advice

Why EOFY is a good time to buy a new car

Sure, the end of the month is a great time to buy a new car, but nothing compares to the deals at the end of financial year

The end of the financial year is looming upon us, when manufacturers and their car dealer networks are especially keen to lure a greater number of customers in order to hit crucial sales targets.

The advantages come in all shapes and sizes, with incentives varying between simple price discounts, value-adds like free on-road costs or upgrades, and low interest rate specials. Each is designed to trigger an earlier decision from a customer to purchase a new vehicle.

Honda Australia has been one of the more prominent brands to advertise End of Financial Year (EOFY) campaigns across all types of media. The company’s director, Stephen Collins, says it is important to stand out during a crowded period of deals in what is already an ultra-competitive market.

Read: Who is doing EOFY deals on dual cabs?

“June is generally about 30 per cent stronger than the average month [for new-car sales] and traditionally May/June is the biggest-selling period of the year,” says Collins. “Everyone is out there with offers; it’s a good time for buyers.”

In June 2018, 130,300 new vehicles were purchased in Australia – a sales figure nearly 20 per cent higher than the next-best month of March (106,988). 

“We’re not huge in the fleet business but a lot of what I call below-the-line-type discounting generally goes on throughout the year,” says Collins. “May/June is traditionally where private buyers come out and our offers reflect that.

“We try to keep them simple with a genuine value-for-money offer. A lot of the finance offers tend to get complicated.”

Cars in dealership

Virtually all the major brands are currently running EOFY deals, if under variously titled banners.

Read next: 10 questions you should be asking your car dealer

Mercedes-Benz Australia is one of the exceptions, though the company says it’s nothing to do with the traditional concern of luxury-car resale values being adversely affected by big discounts.

“The old days of chattel mortgages [buying a car outright] doesn’t really exist in the same form,” says company spokesman David McCarthy. “So many vehicles now have a guaranteed future value. You’re effectively renting a car for three years, and if you tick the boxes of the mileage limit and servicing you give it back.

“If it’s worth more than the residual you might use that extra value to come off next vehicle, but if it’s worth less than the future value it’s not your loss, it’s the financial company’s loss.”

McCarthy says the guaranteed future value product, low interest rates and a stable market have made great conditions for buying a car, though says the brand doesn’t necessarily place a big emphasis on June 30.

“Historically the end of any month is often a good time, but the rule doesn’t hold fast because the market is so competitive all of the time.

Read next: Top Ten New Car Deals: May 2019

“Every dealer has a target, whether it’s quarterly, half yearly or annual, and they’re monitoring them on a daily basis. There might also be a target for a specific vehicle [at any time of the year], and if so, they will create an incentive for that model. So the end of financial year is important but lots of other times are important.”

Couple buying car dealership

The general sales manager for the Mazda Artarmon dealership, Nick Woods, says manufacturers apply substantial lifts in targets –  up to as much as 50 per cent, depending on the brand – for busy months such as May and June.

He agrees with McCarthy, though, that there’s no longer a bad time to buy a vehicle.

“You have run-out deals [on outgoing models], and then running out cars, for example, so realistically there are always incentives to buy cars,” he said.

Don’t necessarily expect to find a deal on exactly the model you want even at this time of the year, however. Woods says manufacturers generally steer away from discounting or promoting cars that are selling well organically.

Mazda still seems to be encouraging deals on its popular models, such as the CX-5, though the vagueness of the company’s EOFY offers is quite deliberate.

Read next: New Cars for 2019 | Cheapest new cars coming in 2019

“There is a hook with the free on-roads and so forth, but saying ‘there’s more’ is quite a clever campaign,” says Woods. “That generates enquiries at the dealerships so they can entice a customer in and try and negotiate a price.”

The good news is that even when a manufacturer is advertising a strong end-of-financial-year deal, it’s still possible to use the tried-and-trusted tactic of haggling.

“At this risk of upsetting my colleagues and peers, there’s always more,” says Woods. “In short, a campaign doesn’t come out from a manufacturer without a margin. There’s always something in it for the dealer.”

Know what you want and be prepared to squeeze, as dealers are just as keen to get the car off the showroom floor as you are.