Competing with dealerships on finance offers

We are heading into the traditional “Plate Clearance” sale period, so dealers are pulling out all the stops to get customers in the showroom doors to clear 2019 stock, including offering low interest rate finance deals.

Plate Clearances relate to the date stamped on the car’s build plate, which tells us when the car rolled off the production line. This shouldn’t be confused with the compliance date, as compliance usually determines the model year of a car when new. It is the build date that a car will always be valued by down the track.

Quite often there will be no difference between cars built either side of New Year’s Day – for example, a Toyota HiLux built in October 2019 might sell on the same day as an identical car built in February 2020, however it will always be defined as an older car because of its build date.

This does have an impact on depreciation and resale value, so it’s important you prompt your clients to ask for the build date when researching their next car purchase.

We find new car buyers generally want a car built in the same year, so right now the focus for dealerships is to clear stock before the New Year – making November and December a great time to negotiate.

Another common marketing approach we see at this time of year, is the “0% car finance” or “1% interest rate” offers. And as the saying goes, if it sounds too good to be true, it usually is. The fact is that 0% finance on new cars can often be more expensive to buy than the same car bought with a standard finance interest rate.

Here are some tips so you can help educate your customers on the pitfalls of dealership car finance offers, and remember to ALWAYS read the fine print!

  • Check how much the total repayments will be over the life of the loan, and for the breakdown of all fees and any other charges.
  • Check if the offer is only available on selected make/models, and specific colour options, and if the price of the car is negotiable.
  • Always compare the car and finance offer in the dealership with those available from our 40+ lender panel. We can often find a better deal that is tailored to suit your client’s needs.
  • Check the build date of the vehicle as mentioned earlier.
  • Check the length of the loan. Many low interest rate offers are only available over three years, and the monthly repayments may be higher than a regular interest rate over a longer-term loan.

If you have any specific car finance scenarios, please contact our Broker Support Team for advice and quotes. The End of Year Plate Clearance sales are a great opportunity for you to touch base with your clients about upgrading their car, as there can be some great deals available this time of year.