[Updated] EOFY 2023 - 5 Major Benefits of Buying a Car at the End of the Year

Many car dealerships see around a 30% increase in average sales during June, with May-June being the busiest car sales period of the year. Why? Well, it’s because the stars align for consumers as several factors mean they can get a fantastic deal on a vehicle at the EOFY (end of the financial year).

When shopping for a new set of wheels, customers can benefit from lower prices, discounted value-adds, and low interest-rate specials at the end of the financial year. These incentives look to push consumers to make that purchasing decision. But why does this happen?

Let’s examine why the EOFY may be the best time to buy a new car.

1.   Sales Targets

Car salespeople often work by month to month sales targets. That’s why the last few days of each month are often a great time to get a deal throughout the year. Dealerships seek to get a few more sales over the line as this can affect bonuses, so salespeople are willing to push their margins in the last few days of the month. Often, this desire to push sales through is evident at the end of the tax year as workers look to finish the year on a high and make the most of available bonuses.

This is heightened at the end of the financial year by a number of other factors. First, car manufacturers often incentivise the sale of old car models to make way for upgrades or newer models at the start of the new financial year - they need to get rid of old stock on showroom floors to showcase the incoming models.

Second, and related to this, car manufacturers look to clear out a load of old stock at the end of the financial year for their own complex tax reasons.

This necessity to make room, to exchange the old for the new, drives prices down with the customer as the ultimate beneficiary. Even if there isn’t a specific price reduction of an older model, the drive to shift vehicles might result in the seller throwing in other value-adds. This could be complimentary upgrades, a new set of alloy wheels, roadside assistance packages, or special ‘limited-time-only’ type interest rates.

2.   Industry Buy-in

 Another reason why customers can expect a good deal at the EOFY is that it has become a characteristic of the industry. Customers expect good deals and discounts in the winter months, so there is the notion that dealerships and manufacturers compete to offer deals to entice their target market.

 This is why we’re bombarded with car adverts at this time as car manufacturers promise “There’s never been a better time to buy”. In this sense, EOFY bargains are a kind of self-fulfilling prophecy.

At this time of the year, all the big brands need to compete for a buyer’s attention, offering value-for-money deals to try and meet their sales targets in what is an incredibly competitive market year on year.

3.   Business and Sole Trader Buyers

Business buyers and sole traders with ABN can benefit from tax advantages when buying a new or used car at the end of the financial year. 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. While this isn’t relevant to all buyers, if you own a business that uses passenger vehicles, buying before the end of the financial year to take advantage of tax deductions is a great idea.

4.   Possible Resale Value

This one may take a little research on your part, depending on make and model, but taking advantage of price fluctuations can result in a savvy business decision.

Let’s say, for example, you take advantage of the price reduction on a 2022 model just before a 2023 model is released. This car still has resale value. If you don’t flog it too hard and keep its service history up to date, you can resell this after three and four years to recoup some value.

How much your car will be worth depends on several factors, including the make, model, and other external economic factors - it's worth doing some research before making your purchase.

The alternative, of course, if you’re not planning to resell the car, if you know that you will be racking up miles, is to take advantage of deals for even cheaper older models, fully aware you don’t plan to recoup any of your costs.

5.   Leverage

We’ve already touched on this, but manufacturers and dealerships alike are under pressure at the EOFY to shift their stock. They need to sell older plated cars to make way for new, more desirable, more profitable models.

If you go into the dealership with this knowledge, it arms you with negotiating power. Don’t forget that the salespeople know the profit margins for every car in the lot, and there is often substantial wiggle room to work on their initial price.

They want the sale for their bonus, so use this to leverage a better deal. Suppose you can’t obtain a lower price, then ask for other add-ons to increase the value of your package - interior upgrades, third-party insurance packages, or extended warranties, for example. These are tools in the usual arsenal of a car salesperson, so you should take advantage of them to get yourself a great deal.

Be Wary of EOFY Traps

While there are undoubtedly some great deals out there to be had in June, customers should be wary of EOFY traps and deals that sound better than they are. Buying a vehicle is often a large outlay and a significant portion of your budget, so you’ll want to get it right.

• Make sure you plan and know what you want. If you can get as specific as knowing the make and model of the car, this puts you in a great position to negotiate on a level playing field. Going in with a vague notion of an automobile with four wheels and seatbelts will enable the dealership to steer you their way - you’ve got a better chance of a good deal if you are clear about what you need.

• Shop around - take the time to compare different dealership offers. If you are trading in, get more than one quote to be sure you’re getting a good deal. When going to multiple dealerships, check that the same overarching group does not own them as they may be trying to monopolise price. Feel free to share details of deals elsewhere with salespeople and play two dealerships off each other. Remember, they’re in competition for your business, so if they can make a deal, they will.

• Some deals may not be all they promise. Do your due diligence as you would with any large purchase. One example of this is companies making a fuss over offers that already exist. For example, if a company includes an EOFY offer of a 5-year warranty, even though the car comes with this as standard at any time of the year.

When making a big purchase, any money-conscious consumer knows that it pays to do a little research to buy at the optimum time. While many car dealerships and manufacturers offer year-round discounts to entice buyers, you’ll often find the most favourable deals at the end of the financial year.

Being patient and waiting until the end of the financial year can have enormous benefits for those looking to secure a discount on their next vehicle.

FAQ: EOFY Car Sales

When is the best time to buy a car?

Due to the potential savings, buying a car at the EOFY is an excellent option for money-conscious customers. This is due to pressure on manufacturers and dealerships to shift stock before the new tax year, leading to bargains passed down to the customer.

 What Shouldn’t I say to a Car Salesperson?

 If you’re looking to get the best value on your new car purchase, there are certain phrases you should avoid when speaking to a seller. Saying things like “I love this car!” or “I haven’t seen this colour anywhere else” will be music to their ears. You don’t want to give away any leverage in a negotiation.

The general advice is not to mention numbers before they do, as you don’t want to betray a lack of knowledge or steer yourself away from a potentially better offer. For example, saying, “I won’t accept less than $5000 for a trade-in” when your car may be worth $7,000. Mentioning a monthly budget is also a no-no as this detracts from the main point - the value of the vehicle. Salespeople want to get you talking about monthly finance options as you’ll end up paying more in interest anyway, so don’t discuss that until after you’ve decided on the car.

Besides EOFY, when is a good time to buy a car?

For similar reasons to the EOFY, buying a car in November and December is often great to get some value from your purchase. That’s because manufacturers and dealerships often have annual targets to meet and so are happy to knock prices down to tighter profit margins to meet those targets.