2017 a record year for car sales

2017 a record year for car sales

Australia’s sales of new motor vehicles rose at the end of December 2017, wrapping up a strong year for the nation’s automotive market.

According to the Federal Chamber of Automotive Industries (FCAI), 2017 was a record year for sales in the Aussie motor industry – the fourth in five years.

It was also found that 2017 was the first full year in which the sales of SUVs (465,646, or 39.2% of the total market) outstripped those of passenger cars (450,012, or 37.8% of the total market).

According to the December 2017 figures from the Australian Bureau of Statistics (ABS), the December 2017 trend estimate (99,756) increased by 0.2% when compared with November 2017. Sales of Sports Utility Vehicles (SUVs) and Other vehicles were up 0.5%, while passenger car sales were down by -0.3%.

Region December sales (trend) Monthly change Annual change
NSW 33,161 0.1% 0.6%
VIC 28,323 0.2% 3.3%
QLD 19,419 3.2%
SA 6128 0.6% 3.9%
WA 8549 0.4% 8.8%
TAS 1826 2.2% 10.9%
NT 837 -1.9% -1.8%
ACT 1513 -0.3% -3.8%
National 99,756 0.2% 2.8%

Source: ABS

Going state by state, the largest bump in new car sales was recorded in Tasmania, where the 2.2% growth on last month continued an upward trend that commenced in April 2017. On the other hand, the downward trends recorded in the Northern Territory (-1.9%) and the Australian Capital Territory (-0.3%) continued a trend which commenced in July 2017.

In annual terms, new car sales around the nation were up 2.8% from December 2016 on a trend basis, according to the ABS.

According to FCAI chief executive, Tony Weber, the market growth in 2017 can be partially attributed to the stability of the Australian economy and low interest rates, though it was the fierce competition between brands within the market place which provided the momentum:

“Clearly Australian consumers recognise the value for money that is on offer in the new vehicle market, and responded accordingly.”

“To have eight record months out of 12 in 2017 speaks volumes for how brands successfully placed new products and incentives into the market which kept attracting buyers into the showrooms right through the year.”

According to FCAI, Australia’s top-selling car for 2017 was the Toyota Hilux, for the second year in a row. Toyota was also found to be the top-selling brand of 2017 with an 18.2% market share, followed by Mazda (9.8%), Hyundai (8.2%), Holden (7.6%) and Mitsubishi (6.8%).

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Learn more about car loans

How much is your car worth?

If you already own a car, you could potentially bring down the cost by selling your car in the process. Before that happens, though, you’ll need to find out how much your car is worth.

One of the first places to find this value is to research the value of your current car, giving you an idea of roughly how much it’s worth in its peak condition.

There are plenty of websites that offer a free online valuation, allowing you to enter your car’s make, model, year, badge and description, with results listing a price guide based on both selling your car privately and through a dealership.

Of course, dealerships will try to profit on your trade-in by buying it for less than they can sell it, making it highly unlikely that you’ll get the same price selling a car to a dealer as you would selling a car privately.

However, private car sales can be costly and can take months to sell, making car trading more convenient with a guaranteed return, even if you may not be able to realise the total value of your car’s worth.

Remember that everything is negotiable. If the dealership is offering you less for your trade than you wanted, try to negotiate elsewhere to gain that money back. Start by negotiating on the price of the trade and then ask them if they can give you a further discount on your new car.

What is the luxury car tax?

The federal government imposes a luxury car tax of 33 per cent on the value of a car above a threshold. As of the 2017-18 financial year, that threshold was $75,526 for fuel-efficient vehicles and $65,094 for other vehicles. So a fuel-efficient car worth $80,000 would be taxed only on the difference between the threshold and the value of the car ($4,474), rather than taxed on the entire $80,000. Similarly, an ordinary car worth $70,000 would be taxed on the $4,906 above the threshold, rather than the entire $70,000. The luxury car tax is paid by dealers that sell or import luxury cars, and also by individuals who import luxury cars.

What is depreciation?

Depreciation is the reduction in the value of your car. Almost every car loses value each year, although at different rates. As a guide, cars depreciate on average by 14 per cent per year in the first three years and then eight per cent per year after that.

What is resale value?

The resale value is the price you could realistically charge if you were to sell your car. Almost every car loses value each year, although at different rates. As a guide, cars depreciate on average by 14 per cent per year in the first three years and then eight per cent per year after that.

What is a car loan?

A car loan, also known as vehicle finance, is money that a consumer borrows with the express purpose of buying a vehicle, such as a car, motorbike, van, truck or campervan. Car loans can be used for both new and used vehicles.

How much is my car worth?

If you own a car, it may be something that can help you bring down the cost of your next vehicle purchase through its sale. However, before you can do that you’ll want to find out how much your car is worth.

Your car’s worth can depend upon various aspects, including:

  • Age
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  • Model and make

A great starting place for aspects of this includes websites that offer online valuations, allowing you to enter your car’s make, model, year, badge and description, with the listed results displaying a price guide based on both selling your car privately and through a dealership.

Both have pros and cons, as cars can be very profitable, something that will no doubt impact any chance you have to make the most of your car’s value upon sale. Dealerships will try to profit on your trade-in by buying it for less than they can sell it for, so you shouldn’t expect the same price selling a car to a dealer that you would necessarily get selling a car privately.

What is stamp duty?

Stamp duty, or motor vehicle duty, is a tax you pay when you transfer a car into your name. Stamp duty applies to both new and used cars. Stamp duty is a state tax, so rates and conditions vary from state to state: New South Wales, Victoria, Queensland, Western Australia, South Australia, Tasmania, ACT and Northern Territory.

What is vehicle finance?

Vehicle finance, also known as a car loan, is money that a consumer borrows with the express purpose of buying a vehicle, such as a car, motorbike, van, truck or campervan. Vehicle finance can be used for both new and used vehicles.

How much can I get towards a new car as a single parent?

It really depends on your financial circumstances as to how much a lender will grant you towards a new car as a single parent. With most lenders, the smaller the loan you apply for, the higher your chances are of approval, so getting a cheaper car or adding some savings of your own, may be a valid option if you are struggling for approval on a car loan.

How much can I get towards a new car as a single parent?

It really depends on your financial circumstances as to how much a lender will grant you towards a new car as a single parent. With most lenders, the smaller the loan you apply for, the higher your chances are of approval, so getting a cheaper car or adding some savings of your own, may be a valid option if you are struggling for approval on a car loan.

What is an LVR?

The LVR, or loan-to-value ratio, is a percentage that expresses the amount of money owed on the car compared to the value of the car. For example, if you take out a $15,000 loan to buy a $20,000 car, you have an LVR of 75 per cent. LVRs change over time as you pay off your loan and your car depreciates in value. For example, two years later you might now owe $10,000 on your car, which might now be worth $15,000. In that case, although there would still be a $5,000 difference between the size of the outstanding loan and the value of the car, the LVR would now be 67 per cent.

What is residual value?

The residual value of a car is how much it will be worth at the end of a lease period. Finance companies need to calculate a car’s residual value before they can know how much to charge during the lease period. For example, if a financier calculates that a $30,000 car will have a residual value of $16,000 at the end of a five-year lease, the financier will know that it must charge $14,000 to break even on the lease – and more to make a profit.

What is trade-in value?

The trade-in value is the price you could realistically charge if you were to sell your car to a dealer while buying a replacement vehicle. Generally, a car’s trade-in value is less than its market value. That’s because the dealer has no interest in buying your car unless it can make a profit – which can only be done if the dealer has room to increase the price.

What is a car lease?

A car lease, also known as an asset lease or finance lease, is an arrangement by which a finance company buys a car on your behalf. You get to borrow the car in return for making regular payments to the financier. At the end of the lease, you can either buy the car or hand it back.