With the RBA holding the cash rate steady for July, many operators may be wondering when a cut will come and how to secure affordable truck loan interest rates. The Reserve Bank defied the expectations of the markets, and the hopes of many Australians, by not announcing a cash rate cut at their 8 July meeting. For operators that had held off on their new financial year acquisitions in anticipation of securing a better rate after a July cut, will undoubtedly be questioning ‘what to do next?’.
Should they proceed with their vehicle acquisition at current rates? Should they wait until the next RBA Monetary Policy decision in the hope of a rate cut then? If the acquisition is required now, many will be wondering how and where to find the most affordable finance?
It may be a challenging time and especially concerning coming at the start of the new financial year. A time when businesses look to lock in and shore-up their asset investments and finances for the year ahead. To allay worries and provide clarification, we explain what is known so far about the RBA decision and how you can still achieve your best possible rates on heavy vehicle finance.
July RBA Rate Decision
The Board of the Reserve Bank (RBA) decided at its 8 July Monetary Policy meeting to keep the cash rate at 3.85%. In the statement issued to announce the decision, Governor Michelle Bullock revealed that the decision was made with 6 Board members in favour and 3 against. No names were attributed to the votes. This is a first for the RBA as the for/against numbers have never previously been publicly disclosed.
In explaining the reasons for holding rather than cutting the cash rate as was widely expected, Governor Michelle Bullock said that while inflation was continuing to moderate, the June quarterly CPI figures were expected to be a little stronger than forecasts. The Board judged that they had more time to wait for further information to ensure that inflation was on track to reach and sustain the target 2.5%.
Other influences were also noted, with the outlook remaining uncertainty internationally. The US tariff scenario and developments in trade policy are expected to have an ‘adverse effect’ on economic activity globally.
Uncertainties in the domestic economy as a result of these global developments and domestic matters, also remain. The Board is remaining cautious about the outlook but said that monetary policy is well-placed to react to global developments should they impact inflation and economic domestically.
With no rate cut in July, eyes and ears will now focus on the next Monetary Policy meeting and decision on 12 August.
Getting Competitive Truck Loan Interest Rates
Operators that are relying on RBA rate cuts and the ensuing lender rate reductions to get lower asset finance rates could be overlooking some of the key guidelines to getting the best rates on business loans. The essentials include - finding the right lender as rates vary with different banks and non-bank lenders, use a broker for access to more lenders including specialist heavy vehicle non-bank lenders and to source your most suitable loan and competitive rate, and maintain a good credit rating.
Commercial lenders set their rates based on their own forecasts and guidelines. They don’t all follow exactly the timing of RBA decisions with their own rate changes as happens in the home loan market. Many asset finance lenders offer competitive rates at all times, regardless of RBA decisions. Knowing who they are and accessing their loan products often requires the professional services of a broker.
Using a broker allows businesses access to experts and multiple lenders, including with Jade, specialist non-bank lenders in the heavy vehicle sector. Enabling access to finding the most suitable lender, and the best rates currently on the market.
Lenders review credit profiles when preparing rate offers with the best offers going to those with a good rating. Good ratings are seen as lower risk than poor credit rating businesses. Maintaining a good rating by meeting debts and payments on time can contribute significantly to being offered the best possible interest rates.
Variations in Truck Loan Interest Rates
Regardless of what the RBA decides, there will be variations in rates for different types of credit facilities, for different businesses and individual application specifics, and for new and used vehicles. Chattel Mortgage and Commercial Hire Purchase always attract lower rates than Leasing, with Rent-to-Own attracting the highest in asset acquisition credit products.
New businesses without full financials can be seen as a higher risk and attract a higher rate than a business with full documentation, but we can achieve competitive offers. Other factors also contribute to the rate offered to a specific business on a specific vehicle purchase. Using our expertise and resources can assist and support operators to achieve their most competitive offer and secure affordable financing.
For your most competitive and affordable truck loan interest rates, contact Jade Truck Loans on 1300 000 003.
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.
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