Interest Rates & Lending Outlook: Time to buy?

In the midst of nearly two years of profound uncertainty, both on local and global scales, business proprietors and operators find themselves in a more assured stance to embark on substantial investments, including new vehicle acquisitions. The commitment of New South Wales (NSW) and Victoria to a structured reopening path, following significant Delta variant outbreaks, coupled with the nation’s imminent achievement of the critical 70% and 80% double-dose vaccination targets, has started to bring about greater clarity for businesses across various sectors. This emerging clarity is particularly welcomed by truck operators who will undoubtedly experience relief as borders gradually reopen, with some regions even providing definitive timelines for resumption, ultimately facilitating smoother interstate transportation routes.

So is it time for you to consider buying that new truck? In his October Monetary Statement, Reserve Bank of Australia Governor, Dr Philip Lowe, noted what many analysts concur with. That while the economy is expected to bounce back, the pace and the timing of that economic bounce back from Delta is uncertain.  Jade Truck Loans cover off on some of the key factors around truck loans, lending and the economy to assist your truck buying decision-making process.

Economic Factors

Overall, economic analysts and expert commentators are radiating optimism as they cast their gaze towards the horizon. The pivotal economic states of Victoria and New South Wales (NSW) are emerging from protracted lockdowns, further bolstering this positive outlook. This buoyant sentiment within the business realm is underpinned by the steady ascent of vaccination rates, which, according to authoritative sources, are approaching thresholds that could potentially herald the cessation of widespread lockdowns. Such a development has ignited a renewed sense of assurance.

Amidst this landscape, supply chain dynamics take center stage in numerous industries. Global supply chains remain a topic of extensive discourse, generating challenges across various sectors, and this trend may persist for the foreseeable future. On a local scale, consumers are emerging from lockdowns with disposable income in hand, thus sustaining the need for open distribution channels and well-stocked shelves, consequently upholding robust demand for transport and logistics services.

After navigating a recent period of decline, the construction sector is now exhibiting signs of revitalization. These favourable indicators bode well for those operating within this industry.

In a not unexpected outcome, the September jobs figures recorded an increase in unemployment from 4.5% to 4.6%. These figures do not account for the full period of the NSW and Victoria lockdowns and some expect that figure to rise in the next reporting period. While the increase may have been much less than some expected, the drop in those looking for work and in reduced hours worked is of greater significance.

Anticipations align around the notion that, as businesses regain the capacity to fully resume operations under sustainable density guidelines, a resurgence in hiring efforts will likely transpire, consequently curbing the trajectory of unemployment once more. These unemployment statistics bear substantial weight in the lending sphere, functioning as a crucial gauge monitored by the Reserve Bank of Australia (RBA) when contemplating potential adjustments to interest rates.

In the forthcoming period, a strategic decision to re-establish our international borders for international students is poised to transpire, subsequently followed by a subsequent relaxation for skilled migrants. This strategic progression is anticipated to alleviate the labour scarcities experienced in specific sectors, including agriculture and hospitality.

Interest Rates

Given the valuable lessons gleaned from the COVID-19 ordeal, it's entirely understandable that numerous business proprietors and truck operators adopt a cautious stance towards investments. Throughout, securing truck finance with low interest rates remains pivotal to ensuring cost-effective acquisitions and maintaining manageable overheads. While we've established our business on a foundation of consistently low interest rates, the current landscape of official cash rates is enabling us to extend even more economical interest rate truck loans.

Our lenders align their rates closely with the official cash rate, which has persistently maintained historically low levels since November 2020.

Despite some economic analysts advocating for an elevation in the official interest rate as a response to burgeoning property prices, the central bank has steadfastly adhered to its course. The October Reserve Bank of Australia (RBA) meeting confirmed the stability of the cash rate and the commitment to the bond purchasing program.

Presently, inflation stands at approximately 1.75%, falling well below the Bank's targeted range of 2-3% that typically triggers contemplation of a rate increase. The RBA reiterated its stance in the October Monetary Statement, reaffirming its projection of postponing interest rate hikes until the year 2024.

Worth noting is that our Jade Truck Loans are established at a fixed interest rate. The rate achieved when the loan is established remains steady through the entire fixed loan term which can be up to 7 years. So getting in now, while rates are at the lowest on record, can set buyers up with an overall cheaper loan for years to come.

Business Support Measures

While the focus of governments in the past few months has been very much on lockdowns and recovery measures and a vaccination push, we remind potential truck buyers of the attractive investment measures which are still available to eligible businesses. IAWO and temporary full expensing are available through to 2023 and can present significant tax benefits.

Across various states, government bodies are rolling out distinctive economic recovery initiatives, some of which are strategically directed towards specific industries. Significantly, infrastructure ventures remain active across multiple regions, creating favorable prospects for a diverse spectrum of truck operators.

In its October statement, the Reserve Bank of Australia (RBA) underscored that both federal and regional governments, encompassing territories and states, are offering pivotal support to the financial standing of businesses, thus enhancing their balance sheets.

Truck Loan Options

As a refresher on what’s available by way of truck loans, we offer the full selection of finance products. Business owners are advised to consult with their accountant to discuss which will best suit their individual business and objectives.

Truck buyers can select from:-

The same loan types are available for the acquisition of all types of trucks from light through to heavy duty and for new and used vehicles. The interest rates vary across the products and can vary on new v used vehicles.

We direct you to our Interest Rate Comparison Calculator to Calculate Truck Loan Repayments, helping you to generate rough estimates on what repayments may be for your preferred vehicle. This resource empowers you to make informed decisions by providing insights into potential repayment scenarios based on different interest rates and loan terms.

To discuss how we can assist you to facilitate the investment in new vehicles, please have an obligation-free conversation with our consultants or simply request a truck loan quote.

Contact Jade Truck Loans on 1300 000 003 to discuss low interest rate truck loans.