Making substantial business acquisition decisions often hinges on the factor of timing. The pivotal question arises: should one take immediate action or adopt a wait-and-observe stance? Presently, a multitude of factors and occurrences are aligning to support both of these perspectives. The impending Federal election is inundating news platforms with information, simultaneously accompanied by an air of uncertainty regarding the trajectory of the forthcoming government and the concomitant policy landscape. Additionally, the ongoing conflict in Ukraine casts an enveloping cloud of ambiguity over the global economy. Nonetheless, on the front advocating immediate action, an array of truck finance-related rationales powerfully align, strongly favouring the proposition that business operators should embark upon the acquisition of new trucks and heavy vehicles without delay.
For those individuals who find themselves straddling the fence, grappling with the quandary of whether to initiate a truck purchase at this juncture or defer it to a later date, we present a compendium of pivotal topics meriting contemplation.
Positive Economic Signs
The economy has exhibited a remarkable recovery, surpassing initial projections in the wake of the Delta and Omicron outbreaks. Gradual easing of restrictions across most states has facilitated businesses in elevating their operations to full capacity. With unemployment currently at its lowest point in over four decades, this statistic often serves as a favourable indicator of a thriving economy.
In the quest to maintain a competitive edge, businesses must harness their maximum potential. This entails a focus on enhancing productivity, a facet that could potentially be addressed through the integration of newer model vehicles. These contemporary models incorporate highly sophisticated systems engineered to yield heightened efficiencies and productivity enhancements.
One noteworthy avenue where advancements may transpire is fuel efficiency. The operation of a new truck has the potential to yield substantial savings in fuel expenditures. For numerous operators, fuel costs constitute a significant consideration, where even incremental savings can exert a positive influence on their financial bottom line.
By now pretty much everyone knows that the RBA has kept the official cash rate at the record low of 0.1% since November 2020. But with inflation climbing and unemployment diving, the move to increase the rate is inevitable and most likely imminent.
Any alteration in the cash rate implemented by the Reserve Bank of Australia (RBA) reverberates throughout lending markets, encompassing the domain of truck finance. Within this realm, banks and lenders undertake an evaluation of the prevailing situation, adjusting their lending rates in accordance with their respective corporate protocols and market exposure.
While the impending rate increase, the first in over a 12-year span, has been a topic of anticipation, it is crucial to recognize that this adjustment may not constitute the sole instance. The prevailing discourse predominantly revolves around the RBA's imminent move to heighten rates, however, it is imperative to eschew the notion that this would signify a singular adjustment.
As the anticipated change approaches, potentially occurring in the months of May or June, it could mark the inception of a series of increments throughout the current year and possibly extending into 2023. Moreover, the magnitude of these adjustments could surpass initial projections. Consequently, the forthcoming decisions of the RBA Board assume a significant role in shaping the trajectory.
In terms of our specialized domain, truck finance, we perceive interest rate escalations as a decisive impetus for business operators to take prompt action, particularly if they are contemplating vehicle upgrades facilitated by finance. While our unwavering focus remains on attaining more economical and favourable interest rates on truck loans, the cost-effectiveness thereof remains contingent upon the broader market dynamics. Diverse lenders will respond variably, some might incorporate the full rate increase, while others may opt to sustain competitiveness by maintaining lower rates.
With our vast accreditations we have the capability and the determination to scour a vast section of the heavy equipment and vehicle lending market to source the cheapest rates to suit individual customer requirements.
Buying a new truck with finance at the current low interest rates could represent a very significant savings compared with the same loan acquired in say 6 or 12 months’ time. If you’re still not convinced, use our Truck Finance Calculator to calculate estimates on what loan repayments may be at different interest rates. Factor that monthly difference over the say 84 months of a truck loan and the balance shifts sharply in the direction of the ‘act now’ argument.
Refer to our Truck Finance & Leasing Interest rates across different loan types for an indication of what can currently be achieved for new trucks and applicants with a good credit profile.
Tax Time, Sale Time
Starting from the onset of May, the countdown toward the culmination of the financial year commences. This juncture encompasses two pivotal aspects, namely the imperative to implement strategies that curtail tax obligations and the advent of EOFY sales, marked by customary discounts proffered by vendors across an array of commodities.
For those inclined to capitalize on the tax deductions attributed to a new truck acquisition within the ongoing fiscal year, the opportune moment to take action is now.
Conversely, with supply constraints and the prevailing scarcity of computer chips wreaking havoc on the availability of myriad manufactured goods over the preceding year or so, it is conceivable that the vehicular sector might witness a reduced incidence of EOFY sales, in comparison to the norm.
Temporary Full Expensing
The tax discussion brings us to the biggie in terms of asset acquisition tax deductions – temporary full expensing or Instant Asset Write-off. IAWO has been around for 2 years now so most business owners will know about the benefits by now.
If considering taking advantage of this measure, Chattel Mortgage for truck & trailer financing is the most appropriate finance product. The key advantage is being able to write-off or expend or depreciate the full purchase price of the truck (if deemed an eligible asset) in the year of the purchase. So get in now to realise that deduction by 30 June 2022.
If you don’t think you have the time to spend sourcing finance, don’t worry about that part of the process. Your Jade Truck Loan consultant handles the hard work so you can enjoy the benefits of a streamlined process towards a cheap truck loan.
Contact Jade Truck Loans on 1300 000 003 to discuss new truck finance.
DISCLAIMER: THIS INFORMATION IS ISSUED PURELY FOR THE PURPOSE OF GENERAL INFORMATION PROVISION. IT IS NOT TO BE TAKEN AS THE ONLY SOURCE OF INFORMATION FOR BASING FINANCIAL DECISION-MAKING. THOSE REQUIRING FINANCIAL GUIDANCE AND ADVICE SHOULD CONSULT WITH THEIR FINANCIAL CONSULTANT OR ADVISOR. NO LIABILITY IS ACCEPTED FOR ANY MISREPRESENTATION OF POLICIES, DATA OR ERRORS IN THIS CONTENT.