More Aussies considering new cars with alternative fuels

More Aussies considering new cars with alternative fuels

More Australians have made plans to buy a new car this year, according to Roy Morgan. But as well as considering the costs of car loans and financing for their new vehicles a growing number of Aussies are also considering vehicles with alternative fuel supplies. 

More new car purchases forecast for 2018

The results of the Roy Morgan Single Source Survey show that as of December 2017, the number of Australians intending to buy a new vehicle in the next 12 months grew by 44,000 to 614,000 – a 7.7% increase on the results from the same time last year.

Looking at the longer term, Australian car buying intentions over the next four years were found to have dropped by 2.29% to 2.26 million from the same time last year. However, with the industry experiencing record sales in 2017 (according to Roy Morgan), this could indicate a positive 2018 outlook for the industry.

New cars with new fuels

According to VFACTS data, 75.3% of new vehicles sold in Australia last year had petrol engines. According to Roy Morgan, of the 2.26 million Aussies looking to buy over the next four years, only 61.9% thought that their next vehicle will most likely have a petrol engine.

Fuel type Sales share in 2017 (VFACTS) New car intenders over next 4 years (Roy Morgan)
Petrol 75.3% 61.9%
Diesel 24.1% 29.2%
LPG 0.0% 0.6%
Hybrid 0.5% 5.2%
Electric 0.1% 3.1%

Source: Roy Morgan

The primary alternative to standard petrol was diesel, with its preference level for new purchases over the next 4 years up 5.3% points to 29.2%, compared to the 2017 VFACTS sales data. Preference levels for hybrid (petrol and electric) cars was up by 4.7% points to 5.2%; fully electric cars by 3.0% points to 3.1%; and LPG-fuelled cars from 0% to 0.6%.

The challenge ahead

Roy Morgan industry communications director, Norman Morris, said that while the new vehicle market has experienced growth over the past decade, it is now facing the challenge of rapidly changing technologies and fuel preferences:

“Most manufacturers are ramping up their development in areas such as electric vehicles and driverless cars but it will ultimately be the consumer that will determine who the winners are.”

“We have already seen some early signs of changes in this industry, particularly in the very rapid changes in fuel preferences, the move aware from cars to SUVs and the speed and range of new models entering the market.”

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Learn more about car loans

What is proof of income?

Before giving you a car loan, lenders will ask for proof of income – documentary evidence that you earn as much as you claim you earn. Lenders will typically want some combination of tax returns, pay slips and bank statements. The reason lenders want proof of income is because they want to be sure you have the means to repay the car loan.

What is a dealership?

A dealership is a car yard or a place where cars are sold.

What is dealer finance?

Dealer finance is a car loan organised through a car dealer – as opposed to car loans organised by a finance broker or directly by the lender.

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 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 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 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 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.

Should I service my own car?

There are also costs associated with vehicle ownership, such as paying for petrol and the obligatory ongoing maintenance. But should you cut down on costs by servicing your own vehicle?

If you’re considering getting out the tool box, spanner, and grease-laden towel, you need to carefully weigh up the risks and benefits. A trained mechanic will need to complete certain tasks, while you may be perfectly capable to handle other aspects yourself.

If you’re short on time, it may be worth paying for the convenience of a full vehicle service. However if you’re trying to slash your expenses, there are some basic maintenance tasks that you can complete yourself.

You should call a mechanic if you’re unsure about a vehicle maintenance task you’re about to take on. However there are a number of maintenance tasks that you may be able to complete with your own two hands including:

  • Replacing your car battery
  • Changing the oil
  • Replacing worn windscreen wipers
  • Replacing blown fuses

Remember to keep your car’s body in good condition, by washing and applying a protective wax on a regular basis, too.

Always check your car warranty agreement as some new car purchases come with an extended car warranty provided your services are conducted at the vehicle service centre where you purchased the car. In these circumstances, you may find the service fee is capped, alleviating some of the maintenance woes.

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
  • Condition
  • 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 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.

Can I buy a car as a student?

Buying a car is a huge financial decision, and shy of marriage and purchasing a house (or perhaps around the world travels), it may be the biggest financial decision you make. But if you’re looking at your empty pockets, don’t despair! Your dream of owning your own car could become a reality, if you look for and compare the right car loans for your circumstances.

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.