Car sales may be falling, but EVs are on the rise

Car sales may be falling, but EVs are on the rise

Australians are likely to buy fewer cars in 2019, but are expected to buy more new-generation models, according to new data.

Roy Morgan Research surveys in December 2018 found that the number of respondents who planned to buy a new vehicle in the next four years was 6.0 per cent lower than in December 2017.

The surveys also found that 8.0 per cent of those who do expect to buy a vehicle will choose a hybrid – a big increase on the 0.9 per cent of buyers who chose a hybrid in 2018.

Another 2.1 per cent of respondents will choose a fully electric vehicle, which would also be a big increase on the current EV market share of 0.1 per cent

Electric vehicle running costs

While electric vehicles are better for the environment than traditional vehicles, they have significantly higher running costs, according to the RACQ:

Vehicle category Cents / km Average cost per week
Small 55.2 cents $159.21
Medium 70.1 cents $202.16
Large 86.9 cents $250.73
Electric 118.2 cents $340.85
Large prestige 141.7 cents $408.68

The RACQ averages are based on typical vehicles in various sizes, and cover the likely areas of expense such as fuel consumption and maintenance.

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Electric vehicles in Australia

There are currently seven different types of new electric vehicle on sale in Australia, according to My Electric Car:

Model Starting price
Hyundai Ioniq $49,253
Renault Zoe $53,589
Renault Kangoo $55,007
BMW i3 $74,789
Tesla Model S $115,600
Tesla Model X $127,200
Jaguar I-Pace $171,152

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Electric vehicle car loans

Here’s how much a five-year car loan would cost if you borrowed 100 per cent of the purchase price and made monthly repayments:

Model Price/loan Total repayments at 6% Total repayments at 8% Total repayments at 10%
Hyundai Ioniq $49,253 $57,132 $59,920 $62,789
Renault Zoe $53,589 $62,162 $65,196 $68,316
Renault Kangoo $55,007 $63,806 $66,921 $70,124
BMW i3 $74,789 $86,753 $90,987 $95,343
Tesla Model S $115,600 $134,092 $140,637 $147,370
Tesla Model X $127,200 $147,548 $154,749 $162,157
Jaguar I-Pace $171,152 $198,531 $208,221 $218,188

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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 CTP insurance?

CTP insurance, also known as compulsory third-party insurance or a green slip, is compulsory if you want to register a vehicle in Australia. If you’re responsible for a car accident, your CTP insurance will be used to pay any compensation due to anyone who might be injured or killed. However, CTP insurance doesn’t cover you for vehicle damage or theft.

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 equity?

The equity is the share of the car that you own. For example, if you take out a $15,000 loan to buy a $20,000 car, you have $5,000 of equity in the vehicle, or 25 per cent. (The lender has the other 75 per cent.) Equity changes 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, you would still have $5,000 of equity in the vehicle, but your share would be 33 per cent.

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 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.

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
  • 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 a dealership?

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

Can you put a deposit on a car to hold it?

It’s up to individual car dealers to decide whether to promise to hold on to cars in exchange for deposits.

Some car dealers will request a deposit and promise, in return, to hold on to the car for a certain period of time. Others will request a deposit but make no guarantees, other than to return the deposit if they end up selling the car to someone else.

Some car dealers ask for deposits; others don’t. If you get asked for a deposit and you decide to pay it, make sure the dealer gives you signed paperwork before you make the payment and a receipt after you’ve made the payment.

What is a guarantor car loan?

A guarantor car loan is a type of loan that features a guarantor on the agreement. The guarantor is a third-party individual, often a friend or relative, who guarantees the loan will be repaid if the borrower defaults on the car loan.

Guarantor car loans are often geared at people who might otherwise struggle being accepted for a secured car loan when purchasing a vehicle. Some of the reasons might include a lack of credit history such as with a student or young person, if there’s bad credit, or age as a factor such as with pensioners.

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.

Can I get a car loan if I am on disability benefit?

Yes, there are some lenders who will consider your application if you are on a disability pension. As long as you have an income, usually of over $400 a week, there are lenders that are willing to supply you with a loan.

There are also micro-financing charitable organisations that provide low interest loans for people on low incomes for certain necessary amenities, such as cars, if they match the specified criteria.