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As acronyms go, EOFY is not particularly sexy like NASA or NASCAR, or fun like ROFL and LOL, and if you’re not an accountant, it probably doesn’t grab your attention as much as it should.
However, the fact is EOFY – or End Of Financial Year – on June 30, isn’t just a slightly dull day in the middle of winter, it’s high noon for bargain hunters, particularly those looking to get a sharp deal on a new car.
And EOFY 2020 is going to be, quite possibly, the greatest time to pick up a car bargain since Henry Ford was a boy.
What a lot of people don’t realise is that the end of any given month, the very last day or two, is always the best time to buy a vehicle because car salesmen, and the dealerships they work for, have monthly quotas to meet and they get paid more when they hit them.
This means that, in any given month, they’re always keen to squeeze a few more vehicles out the door to make their numbers look that little bit better, or to drag them out of a dud period.
When it comes to the end of June 30 in any given year however, the pressure ramps up to a factor of about 12 because it is the end of a year-long accounting period, and the number of sales made over a financial year can add up to big bonuses for dealers on the floor, and the dealer principals upstairs.
Traditionally, June is about 30 per cent stronger than any other month of the year, and the May-June period is the biggest-selling 60 days in any 12-month period. While discounting goes on throughout the year, much of it is offered to fleet buyers for example, while in June, private buyers tend to flood the market and be offered the bargains.
This year, as you may have noticed, has been a bit of a disaster for everyone. Car sales are down a whopping 13.1 per cent year-on-year after three months of trading.
Many people don’t even realise that car dealers are still open, which is because they are an essential service, as the peak industry body known as the Federal Chamber of Automotive Industries (FCAI), has helpfully explained.
“Since the onset of the pandemic, personal transport has increased in importance as it provides a secure, socially distanced manner of commuting to important engagements, such as health care appointments, shopping for essential items, or travelling to work (where necessary),” an FCAI statement tells us.
“To ensure commuters’ vehicles are in prime operating order, dealerships from all brands around Australia have opted to remain open to provide sales support and essential maintenance services.
“This allows customers to safely replace their current vehicle or motorcycle should the need arise. To facilitate the purchasing process, the Chamber understands that short evaluation or test drives are permissible for prospective customers wishing to purchase a vehicle for their essential commuting requirements.”
But just being open hasn’t been enough to have buyers flocking onto showroom floors, at a time when you can be fined by police for leaving home without a feasible excuse.
Car sales are way down, and will have been for months by the time EOFY arrives. This year, more than ever, those manufacturers and their sales people are going to be absolutely desperate to get an EOFY bump, so you can expect bargains on an unprecedented scale, which makes it a very good time to go shopping indeed.
It’s a situation acknowledged by many in the industry, including Stephen Lester, managing director of Nissan Australia.
“Car dealers, like the majority of Australian retailers, are experiencing a significant decline to their business,” he said. “With the traditional peak buying period - the end of financial year - approaching, our dealers are prepared and ready to sell.”
Lower prices, and the ability to negotiate hard, even when it comes to the money you’ll get for your trade-in, for example, are just a part of the EOFY offering.
You can also expect to have other carrots dangled in front of you, particularly if you’re willing to ask for them, like free on-road costs/drive-away pricing, upgrades to better-specified models, and even special deals on interest rates, if you’re looking for finance on that new-car deal.
In any normal year, car companies and dealers might be looking to steer you away from the big-selling models, because those ranges just don’t need the boost as much, but this year, you’ve really got your pick of the litter, because nothing is selling that well in such a barren market.
And it’s vital to remember that people in the business of selling cars are still going to be looking for maximum margin, so you have to be prepared to haggle as much and as hard as ever, it’s just that this EOFY you’re in a particularly strong position. Don’t be afraid to walk out of a dealership and shop elsewhere for comparative deals. And watch how hard that dealer tries to top you leaving once he realises you’re serious.
All those deals you see being advertised are just to get you in the door - realistically there’s still some fat in those prices for the dealer, and you should see them as a starting point, not the final price.
It will also pay to run as close as you can to June 30 to sign on the dotted line, because the sellers are going to get more and more desperate as that deadline approaches. We’re talking about bonuses that could be worth tens of thousands to them. You may well see dollar signs in their eyes, if you look closely enough.
Also, be prepared to take a car from the stock on the floor, even if it’s not the exact spec or colour you think you want, because doing so will get you an even better price. It’s the stock the dealers have on the floor that they’ll be most willing to negotiate on.
So do your research, get your finance in order before you go in - it makes things less complex and quicker - and be prepared to go hard for the best deal possible, and you could be driving your dream car by early July, with a bigger smile on your face than usual.