At AFS Direct, we aim to empower businesses and individuals by offering tailored asset financing solutions. Understanding the scope of eligible assets is crucial for making informed financing decisions. Here’s an overview of the assets we finance and guidelines to help you plan your next steps.

Primary Assets

Our financing covers a broad range of primary assets, including:

Vehicles: Passenger cars, SUVs, utilities, vans, and light commercial vehicles under 12 tonnes GVM.
Heavy Commercial and Equipment: Trucks over 12 tonnes, crane trucks, trailers, buses, prime movers, and a variety of construction and agricultural equipment such as forklifts, tractors, and mobile cranes.
Specialised Vehicles: Caravans, motor homes, and mobile offices (up to three years old).

Secondary Assets

For more specialised business needs, we also finance secondary assets, such as:

Manufacturing Tools: Precision equipment like CNC machines and press brakes.
Medical Devices: Exclusively for APHRA-registered practitioners.
Veterinary Equipment: For registered veterinarians.
Industrial Printers: Supporting businesses in creative and manufacturing industries.
Other Specialised Equipment: From generators and compressors to road-marking tools.

Guidelines for Financing

Flexible Balloon Payments: Terms range from 12 to 60 months, with maximum balloon options up to 50% for vehicles.
Eligibility: Business-use declarations and satisfactory credit profiles are required for approvals.
Custom considerations: Assets not listed may still be eligible, subject to review.

Whether you’re upgrading your fleet or investing in tools to boost productivity, AFS Direct offers the flexibility and support you need to achieve your goals.

New Sports Cars Set to Hit Australia in 2025

As the automotive industry evolves, 2025 promises to be an exciting year for car enthusiasts. A lineup of new sports cars is set to redefine performance, technology, and design on Australian roads. Here’s a sneak peek at what’s coming:

MG Cyberster

This fully electric roadster combines classic sports car aesthetics with cutting-edge technology, making it an exciting option for drivers looking for sustainable performance.

Porsche 911 Carrera T

Designed for purists, this manual-only sports car offers a raw and unfiltered driving experience. Perfect for those who prioritise the joy of the journey over the destination.

Ford Mustang Mach-E

The Mustang legacy evolves with this electric SUV, offering the iconic design and performance Mustang fans love, paired with eco-friendly innovation.

What This Means for You

For businesses and individuals considering vehicle upgrades, these new models highlight the growing diversity in the automotive market. From electric roadsters to high-performance sports cars, there’s something for every preference and need.

At AFS Direct, we’re here to help you seize these opportunities with tailored financing options. Whether it’s a new sports car or a fleet expansion, we’re ready to make it happen. We’re your partner in navigating the world of asset financing. From vehicles to specialised equipment, we’re committed to helping you unlock opportunities and achieve your financial goals.

The best part? You don’t have to figure this out alone. Our team doesn’t just process applications – we’re here to help you and your clients navigate these exciting changes in the market.

The AFS Direct Difference

What sets us apart? It’s simple:

Deep Industry Knowledge: We understand your clients’ businesses and their unique needs
Streamlined Process: Quick turnarounds without cutting corners
Competitive Terms: Flexible solutions that work for your clients’ cash flow
Ongoing Support: We’re here for the long haul, not just the application

Ready to Take the Next Step?

Whether you’re looking at traditional assets or exploring electric alternatives, let’s chat about how we can make it happen. No jargon, no complicated processes – just straightforward solutions.

The post Unlocking Asset Financing Opportunities with AFS Direct appeared first on Asset Finance Systems.

Research revealed that Aussies are purchasing small, fuel-efficient used cars instead of their fuel-hungry counterparts like utes and SUVs as consumer confidence declines amid the increasing cost of living.

Due to this, the value of used utes and SUVs are depreciating faster than light vehicles according to an August 2024 analysis from Moody’s Analytics.

According to Associate Economist at Moody’s Analytics, Catarina Noro, heavier, less fuel-efficient cars have depreciated more than their counterparts since 2022. Ms Noro said that the value of passenger cars has been more resilient in the resale market.

“In Australia, used light vehicle prices are currently still 49 per cent higher than before the pandemic, in contrast to trucks and SUVs, which are just 21.1 per cent higher.

“This discrepancy can be attributed to an undersupply of new lighter vehicles during the semiconductor shortage when manufacturers prioritised larger, more profitable vehicles.”

Furthermore, Ms Noro said that fuel prices, while no longer at their peak, are still much higher compared to pre-pandemic, which means that consumers will prioritise lighter cars that have better fuel efficiency.

Are used car prices declining in Australia?

While there was a small increase in July, the used car prices resumed their descent in August; Moody’s Analytics recorded a decline across all car types.

The price decrease is attributed to the growing new car production with Chinese production increasing by 11.6 per cent and Japanese production increasing by 18.2 per cent in 2023.

It’s predicted that the gradual decline of used car prices will continue for the rest of the year, and the overall price drops will remain slower compared to the trajectory in 2023.

“An extended period of high interest rates could further diminish demand by increasing the cost of auto loans. On the other hand, recent tax cuts and cost-of-living supports could have a stronger-than-expected boost in demand, putting upward pressure on prices.

“Finally, any further disruptions in the supply chain or intensification of geopolitical risks could lead to price increases. Such adjustments would impact not only the new-vehicle market, but likely would also have a cascading effect on the used-vehicle market.”

Used car sales data from July showed passenger cars like the Toyota Corolla, Yaris and Kia Picanto retained their value bettwe compared to SUVs like the Nissan Patrol, Toyota LandCruiser and Jeep wrangler.

Passenger cars aged between two and four years old had an average retained value of 82.1 per cent while their SUV counterparts retained 76.3 per cent of their value while utes retained 77.8 per cent of their value.

The post Used car prices decreasing with one type plummeting faster than others appeared first on Asset Finance Systems.

While many ponder what kind of car they’ll get, other factors that need to be considered include associated costs, additional features, and when the right time to buy a car will be.

Most of us will try to get the timing right when going into the dealership to get the most savings and bang for our buck.

While the end of the financial year is typically the most popular time to purchase a car, there are other times during the year you should consider if you’re ready to start car hunting.

End of the financial year

In Australia, the 30^th of June marks the end of the financial year (EOFY) and is considered a great time to purchase a car.

During this time, manufacturers and dealerships will typically discount prices, offer competitive pricing, and might throw in free car servicing to sweeten the deal and hopefully hit their end-of-year targets to increase their profits.

You can typically negotiate with the salesperson during this time and potentially get roadside assistance, free accessories, or an extended warranty. A lot of business owners purchase cars during the EOFY to maximise their tax return.

However, dealerships are just as savvy and know that people are looking to upgrade their cars in June, thus deals during this period might not be as good compared to other sales throughout the year.

Consider when car makers have their end of the financial year; for example, Japanese car manufacturers have their end of the financial year in March, as they may have sales during that time.

It’s worth checking specific end-of-year periods for the brand you plan on purchasing to increase savings during their sale periods.

End of the calendar year

December should be the month you think about buying a car as dealerships are more motivated stock that will become ‘last year’s’ models.

Generally, there are more bonuses in December like additional equipment and potentially cash bonuses as cars with the previous year’s build are harder to sell in the new year.

It’s worth noting that European, Japanese and South Korean cars are on a ship for approximately two to three months on their way to Australia. This means that a car you buy in December might have come off the assembly line in August or September.

The start of the calendar year

At the start of the calendar year, you may find sales of the previous year’s models at discounted prices. You’ll see dealers driven to sell ‘old’ models before February/March when they become less appealing to customers.

Every car in Australia carries a build plate and a compliance plate, which can be found in the engine bay. The build plate has the unique vehicle identification number (VIN) and the engine, transmission, and paint codes with the date of manufacture (month and date). The compliance plate confirms the VIN and has the month and year the car was certified as compliant with Australia Design Rules (ADS) and approved for sale.

For cars that have been imported and have travel times, the compliance date will be different from the date of manufacture.

Consider enquiring about the build date of the car you plan on purchasing, especially if the car you want has delivery delays.

End of the month

Dealerships and salespeople will have end-of-month sales targets they want to hit, or even a certain sales volume to receive a bonus from the manufacturer.

For a customer, this means there may be end-of-the-month sales to consider when purchasing a new car. It’s more likely that you’ll get discounts and bonuses from dealers wanting to hit their monthly targets.

Model run-out/stocktake sales

New cars age after a few years and demand will decline as new models arrive. Researching how long a model has been on the market and how soon it will be updated will let you know roughly when manufacturers will have their runout sales.

Discounts will pop up from dealerships for models that are about to be replaced, which makes for a great time to get a deal on a new car and perhaps negotiate additional extras with the salesperson as they try and clear older stock.

If you don’t mind having an outdated model, buying a car during a run-out sale will maximise savings on a new car.

When you have your budget

If you go into the dealership without considering a budget, there are costs and additional extras that will pile up without you realising. Factor in any additional upgrades you want be it tinting or extra safety features, on top of insurance costs and certain colours.

When armed with your budget, knowing what extras you want, and timing your trip to coincide with a sale, that day will be the best time for you to upgrade your car.

The post When should you buy a new car? appeared first on Asset Finance Systems.

A study conducted by Compare the Market used data from Australians who requested quotes and compared car insurance policies through its website between 1 July 2023 and 1 July 2024.

Despite VFACTS figures suggesting that new car buyers prefer dual-cab utes, the insurance data reveals that drivers prefer hatchbacks; the Mazda 3 and Toyota Corolla both made appearances in multiple age groups.

Interesting inclusions include the discontinued Holden Commodore, which hasn’t been manufactured since 2020, the Ford Falcon, which ended production in 2016, and the Mitsubishi Lancer, which hasn’t been sold in Australia since 2017.

The Toyota Corolla appeared consistently across all age groups except for the under 25s where the Mazda 3 and Hyundai i30 proved more popular.

Small hatchbacks and sedans were the most popular amongst all the age groups, however, the Toyota HiLux and Ford Ranger also appeared in the top 10.

Medium and large SUVs were more popular with older Australians including the Toyota RAV4, LandCruiser and the Mazda CX-5.

The most compared luxury car for car insurance was the Mercedes-Benz C-Class, which appeared in the top 20 list for those 56 years old and above.

A breakdown of the top 10 cars by age group can be found below.

 The most popular cars overall were:

1. Toyota Corolla
2. Mazda 3
3. Hyundai i30
4. Toyota HiLux
5. Toyota Camry
6. Ford Ranger
7. Toyota RAV4
8. Mazda CX-5
9. Holden Commodore
10. Volkswagen Golf

Drivers under 25

1. Mazda 3
2. Hyundai i30
3. Toyota Corolla
4. Toyota HiLux
5. Holden Commodore
6. Volkswagen Golf
7. Mitsubishi Lancer
8. Toyota Camry
9. Ford Falcon
10. Ford Ranger

Drivers 26-35

1. Toyota Corolla
2. Mazda 3
3. Hyundai i30
4. Toyota Camry
5. Toyota HiLux
6. Ford Ranger
7. Toyota RAV4
8. Mazda CX-5
9. Volkswagen Golf
10. Mitsubishi Outlander

Drivers 36-45

1. Toyota Corolla
2. Mazda 3
3. Toyota Camry
4. Ford Ranger
5. Toyota RAV4
6. Mitsubishi Outlander
7. Toyota HiLux
8. Mazda CX-5
9. Nissan X-Trail
10. Toyota Kluger
    

Drivers 46-55

1. Toyota Corolla
2. Mazda 3
3. Toyota HiLux
4. Ford Ranger
5. Hyundai i30
6. Toyota RAV4
7. Holden Commodore
8. Toyota Camry
9. Mazda CX-5
10. Volkswagen Golf

Drivers 56-65

1. Toyota Corolla
2. Mazda 3
3. Ford Ranger
4. Toyota HiLux
5. Hyundai i30
6. Toyota RAV4
7. Toyota Camry
8. Holden Commodore
9. Mazda CX-5
10. Toyota LandCruiser

Drivers 66 and up

1. Toyota Corolla
2. Mazda 3
3. Hyundai i30
4. Toyota RAV4
5. Toyota Camry
6. Mazda CX-5
7. Subaru Forester
8. Toyota HiLux
9. Ford Ranger
10. Toyota LandCruiser

The post Australia’s most popular cars by age group appeared first on Asset Finance Systems.

US car manufacturer Ford announced a slew of changes to their electric vehicle (EV) plans last week, including the postponement or cancellation of new models in favour of more hybrids.

Ford also provided the launch date of the potential electric Ranger, despite not explicitly calling it that.

A dedicated ‘skunkworks’ team located in California are developing a new EV platform, aimed to be cheaper to make and therefore more affordable for buyers, compared to current models.

“The first affordable vehicle off this new platform will be a mid-sized electric pickup launching in 2027 that is expected to cater to customers who want more for their money – more range, more utility, more useability,” Ford said in a media statement.

 A plug-in hybrid (PHEV) version of the Ford Ranger is due in Australia in early 2025, with claims that it can drive 45km on battery power.

In addition to the announcement of a fully electric Ranger-sized ute, Ford announced delays with its F-150 Lightning successor to the second half of 2027, two years behind its scheduled 2025 launch.

The reason for the delay is to allow Ford to utilise lower-cost battery technology and “take advantage of other cost breakthroughs while the market continues to develop”.

Plans to develop a three-row electric SUV were also canned to focus on introducing more hybrid drivetrains in the segment.

In an effort to take advantage of EV incentives in the US and minimise costs for buyers, Ford will relocate its joint battery manufacturing project with LG Energy Solution from Poland to Michigan.

However, Ford’s agreement with Chinese giant CATL remains unchanged despite the partnership to eventuate with the production of batteries in the future which will disqualify the electric cars they’ll power from receiving the abovementioned incentives.

The post Electric Ford ute announced for 2027 appeared first on Asset Finance Systems.

Written-off cars are more widespread than you’d think and it’s not just due to road accidents. In Australia, adverse weather conditions also contribute to write-offs like hailstorms. The cost to repair hail-damaged cars can potentially be more expensive than the value of the car.

What do you do when your car is written off?

Whether your car has been damaged in an accident or a natural episode, you should notify your insurance provider immediately if you believe that it has been adversely impacted.

Your insurance provider will need to establish if the car is a write-off, which is also known as a total loss, and the type of write-off it is.

The two main types of vehicle write-offs are:

1. Repairable write-off: when the cost to fix the car is more expensive than its value.
2. Statutory write-off: when the car is deemed to be permanently unsafe to drive regardless of the repairs completed.

Drivers can dispute a write-off if their insurance provider has declared it. However, there is a small window of time to raise said dispute, which is usually within seven days.

Additionally, if the car has been declared a statutory write-off, it’s often hard to resolve it without “significant evidence that the legislative requirements of a non-repairable car have not been met and the insurer was wrong”.

Once it has been declared a write-off, the car will be registered in the Written-Off Vehicle Register (WOVR), which helps in the prevention of damaged vehicle identification, such as number plates, and VIN, from being resold at auctions or being used on stolen cars.

If you find that your car has been written off and there is still finance owing on it, you are required to repay the loan, depending on the terms of your contract. Your insurance provider is usually obligated to pay the outstanding amount however, if the payout amount exceeds the amount owing on the car loan, the excess will be paid to the borrower.

There may be a gap between the amount your insurer paid and the finance still owing on the car, and you’ll have to pay out of pocket if you haven’t taken out motor equity insurance.

What’s motor equity insurance?

Motor equity insurance is designed for the above situation. The insurance provider will pay the lender any shortfall owing from your car insurance provider for the write-off, or if your car has been stolen.

While a write-off is never a scenario one wants to be in, be mindful of your financial situation and understand how you can prepare for this.

If you don’t have motor equity insurance and are worried about being able to pay the shortfall of your car loan, get in touch with your lender regarding a hardship payment plan as it only benefits them that the loan is paid off.

The post What happens to my car loan when the car is written off? appeared first on Asset Finance Systems.

Pleas from the automotive finance industry to extend the Fringe Benefits Tax (FBT) exemption on plug-in hybrids (PHEV) are rife to aid sales of hotly anticipated cars like the Ford Ranger and BYD Shark, which are expected to land next year.

Ending the exemption of plug-in hybrid cars being charged the FBT will impede sales of highly anticipated models, a leading finance organisation has said.

FBT is a tax employers pay on certain benefits given to their employees, such as using a work car for private purposes. However, this is set to end on the 1^st of April 2025, causing worries that the massive sales increase of PHEVs evident in the new car market will drop, therefore hampering how well inbound models will perform in the market.

PHEVs have been exempted from the FBT since late 2022 as the Federal Government incentivised the purchase of hybrid and electric vehicles (EVs) to decrease emissions.

The Federal House of Representatives’ Standing Committee on Climate Change, Energy, Environment and Water, met in Melbourne this week for the third hearing of its inquiry into Australia’s transition to electric cars. One takeaway was that the FBT exemption is having an immense influence on PHEV sales and members asked to extend the deadline.

“We believe the most urgent measure that this committee can consider is the extension of the FBT exemption policy beyond its current planned cessation date,” said Rohan Martin, CEO of the National Automotive Leasing and Salary Packaging Association (NALSPA).

“The FBT exemption is probably driving around 50 per cent of all the plug-in hybrid sales in Australia. That exemption is due to end the 1st of April next year. We believe that there will be a demonstrable decline in plug-in hybrid vehicle sales if that happens.

“The timing is also wrong. Next year we’re going to see the likes of the Ford Ranger PHEV, BYD Shark, Mitsubishi Triton PHEV. In the next year or two, you’ll see a number of the larger vehicles that we Australians drive come in plug-in hybrid form.

“Without that particular exemption in place, the take-up of those vehicles would be nowhere near what it otherwise could be. We think that that will be a significant benefit in terms of decarbonisation, particularly helping regional Australia to have a far bigger role.

“Importantly the FBT policy is specifically enabling for the very first time many ordinary, working Australians to purchase a zero-emission vehicle, thereby helping Australian motorists to reduce their carbon footprint.

“Without it, there’s no doubt our transition to lower transport emissions would be slower. It needs to continue for a significant period of time.”

The Ford Ranger PHEV is expected to arrive on Australian shores in early 2025 while the BYD Shark is due sometime in 2024. The Mitsubishi Triton PHEV has yet to be confirmed for Australia.

In July 2024, there were 2,209 PHEVs sold nationally compared to 965 in the same month last year. In 2024, there have been 10,432 PHEVs sold so far, an increase of 129 per cent.

According to Mr Martin, NALSPA observed that PHEV uptake is five to six times higher than what it was two years ago, before the introduction of the FBT exemption.

It’s estimated that approximately 40 per cent of all EVs purchased in Australia since mid-2023 have been facilitated through salary sacrificing/novated lease arrangements, an increase from two per cent in early 2022, before the introduction of the exemption.

One benefit of PHEVs include having no range concerns as these cars use a combination of petrol and electric power. For those in rural Australia, this has played an important role in helping people decide whether or not they should buy an electric car.

However, two committee members questioned why the government should subsidise PHEVs at all.

Queensland MP Bert van Manen, representative for the constituency of Forde, asked NALSPA, “why do we need governments to get involved in continuing to mandate or push this? Previous technologies of all sorts haven’t required government subsidies or government interventions in the market, why don’t we just let the market take course?”

While Deputy Chairman, the Honourable Dr David Gillespie MP for Lyne in NSW, added: “I just see people in hospitals or schools thinking: why should we subsidise people so they can swan around in an EV ute? In my part of the world, it’s a minuscule proportion of people that have EVs that use their vehicle for their job.”

Mr Martin replied, “The amount [of incentive offered through the FBT exemption] has been determined at the level needed in order to decarbonise.

“Prior to the introduction of the exemption, our penetration rate was at around about two per cent. The cost of getting to an EV as we just talked about was the significant barrier and the lack of range of vehicles that Australians drive. If we believe in climate change and the need to decarbonise… it’s a necessary requirement.”

The post Calls to extend FBT exemption to aid in the sales of hotly anticipated PHEVs appeared first on Asset Finance Systems.

Last month’s car sales hit a new July record as the Australian car market returned from a dip in June.

According to VFACTS data released by the Federal Chamber of Automotive Industries (FCAI), there were 99, 486 new cars delivered in July, an increase of 2.7 per cent compared to the same time in 2023, which was, previously, the highest July record.

Deliveries of new cars declined for the first time in June this year after 14 months of consecutive growth, which was the longest streak in 20 years.

Despite the dip in June, year-to-date numbers for this year are looking robust, with 731,898 cars sold compared to 678,618 for the same time last year, an increase of 7.9 per cent.

According to FCAI Chief Executive Tony Weber, the results would have exceeded 100,000 if Tesla and Polestar sales figures were included in the VFACTS numbers.

Another shock was Toyota’s RAV4 being the top-selling car last month with 5,933 sales compared to the second place Ford Ranger with 4,915. This is the fifth time the SUV has surpassed the Ford Ranger.

Mr Weber acknowledged that the RAV4’s success was due to a shift in popularity towards hybrid cars and away from fully-electric vehicles (EVs) in recent times.

“The hybrid performance is highlighted by the fact that the Toyota RAV4 was the top-selling vehicle for the month ahead of Ford Ranger and Toyota HiLux. Most RAV4 sales are hybrids,” Mr Weber said.

“While the first seven months of 2024 have exceeded expectations, the industry remains cautious about the future pending the implementation of the New Vehicle Efficiency Standard coupled with the economic conditions.”

Following the RAV4 and Ranger was the Toyota HiLux with 4,747 sales, the Corolla with 2,688 and the Isuzu D-Max in fifth with 2,369.

Toyota continued to be the most popular new-car brand in July with 22,705 cars delivered, an increase of 18 per cent compared to July 2023 and up 29 per cent year-to-date.

In second place was Mazda with 8,476 sales, up by two per cent, and Ford in third with 7,749 sales, an increase of nine per cent.

EVs accounted for 6.6 per cent of new car sales which was a decrease from seven per cent during the same time in 2023.

Battery-electric car sales have stumbled recently and July’s figures show no sign of it changing with a 41 per cent decline compared to the same time last year with 4,048 compared to 6,864 respectively. Conversely, year-to-date numbers are still increasing with an increase of 8.7 per cent.

Contrasting to this, hybrid sales are thriving with an increase of a whopping 88 per cent compared with July last year and 108 per cent year to date. Plug-in hybrid sales have seen a massive increase with 2,209 units delivered compared to 965 in July last year, a 129 per cent increase for the month and year too.

Top car models July 2024

1. Toyota RAV4 – 5,933
2. Ford Ranger – 4,915
3. Toyota HiLux – 4,747
4. Toyota Corolla – 2,688
5. Isuzu D-Max – 2,369
6. Ford Everest – 2,162
7. Mitsubishi Outlander – 2,110
8. Mazda CX-5 – 2,031
9. MG ZS – 1,815
10. Toyota Kluger – 1,705

Top car brands July 2024

1. Toyota – 22,705
2. Mazda – 8,476
3. Ford – 7,749
4. Kia – 6,620
5. Hyundai – 6,021
6. Mitsubishi – 5,718
7. MG – 4,101
8. Isuzu Ute – 3,821
9. Subaru – 3,601
10. GWM – 3,319

The post Non-ute the top car in July as new car sales records continue appeared first on Asset Finance Systems.

Leading policy think tank, The Australia Institute, released a report revealing that in 2023, the government missed out on approximately $250 million in tax due to a loophole in the Luxury Car Tax, which was first introduced back in 2000.

As a result, buyers of large utes like the Ford F-150, Ram 1500 and Chevrolet Silverado, can avoid paying the LCT “regardless of if the vehicles are used for work, recreation or just commuting”.

The report appeals to the Australian government to remove the LCT exemption for utes, highlighting that the LCT doesn’t affect the majority of utes that are used for “legitimate commercial purposes rather than personal luxuries”.

According to the Australian Taxation Office, the LCT only applies to new cars that cost more than $80,567 as of the 2024-2025 financial year. This was an increase from $71,849 to $76,950 when the financial year changed from 2022-23 to 2023-24. During this time most full-sized utes sat higher than the LCT at the time, which meant that every ute sold amounted to thousands of missed tax dollars.

The Australia Institute’s methodology is conservative and the figure it estimated landed at roughly $321 million, being trimmed down to “more than $250 million” to provide a healthy margin of error. The report also stated that about 75 per cent of the total ‘avoided taxes’ that amounted to $250 million were comprised of full-sized utes like Rams and Silverados.

As an example, the report compares the 2024 Mercedes-Benz E350 EQ Hybrid sedan, which costs $133,370 before on-road costs, with the 2024 Chevrolet Silverado 1500 ZR2 Ute, which costs $138,000. With the LCT, the Mercedes would have to pay an additional $15,841, which would make it $11,211 more expensive than the Chevrolet ute.

The tax exemption reduces the price of utes compared to other expensive cars, including fuel-efficient vehicles. In turn, it essentially incentivises buyers to choose larger, less fuel-efficient cars.

“These vehicles are damaging roads, reducing safety, and increasing emissions, yet they receive a significant tax break,” said Rod Campbell, Research Director at the Australia Institute.

The report noted that there was an increase in American utes between 2022 and 2023, at more than 21 per cent, however, sales may be plateauing as sales declined by 11 per cent in the first half of 2024 compared to the same period last year.

The Australia Institute proposes losing the tax loophole for ‘luxury utes’, but not for any tax exemptions for utes that are actually being used for commercial purposes.

The report states that other policies have contributed to the increase in expensive, non-environmentally friendly utes on the road including the Fringe Benefits Tax.

The “toad and parking regulations, the under-pricing of road damage and carbon emissions and the now-expired Morrison Government’s ‘Temporary Full Expensing’ and the ‘Loss Carry Back’ tax offset” as encouraging Australians to purchase large utes rather than smaller or more efficient cars.

“The Australian public is subsidising big, dumb utes by hundreds of millions of dollars each year,” said Mr Campbell.

“These vehicles are damaging roads, reducing safety and increasing emissions, yet they are given a massive tax break.

“Removing the luxury car tax exemption will not affect most ute drivers, particularly tradies.

“Instead it targets those buying large luxury vehicles, worth sometimes hundreds of thousands of dollars, for personal use.”

Mr Campbell says it doesn’t make sense that the government is essentially encouraging more polluting cars and pointed out that the cost of subsidising them outweighs the costs of some more environmentally conscious policies.

“Economics 101 says that governments should tax things they want less of, and subsidise things they want more of, and it is stunning that the Australian Government seems to want more big, dumb utes.

“This tax break for luxury utes costs more than ten times the Government’s fund for assisting the states to construct or upgrade bicycle paths, the Active Transport Fund.

“Big utes impose considerable costs on society, whether it’s safety concerns or the impact on our roads and climate. Removing the luxury car tax exemption for these vehicles is a good first step in accounting for these costs.”

The post Luxury car tax ute loophole costing the government $250 million appeared first on Asset Finance Systems.

New car supply issues caused used car prices to surge earlier in the year, however as these obstacles are overcome, many second-hand car prices are now coming back down.

Financial data from Moody’s Analytics revealed that used car prices are expected to continue downward after declining in the last three months. This is due to improvements in new car supply and high interest rates, which will reduce the demand for used cars.

Used car prices declined by 1.6 per cent from May to June and, at present, are 6.7 per cent lower than during the same time last year. Utes and SUVs were down 0.9 per cent. The latter group has seen the biggest fall since last year as they’re down 12.6 per cent compared to 6.1 per cent for cars.

Moody’s Analytics expects used car prices to decrease to approximately four per cent in 2024 after it declined by 9.3 per cent in 2023, a rate much slower than anticipated.

Prices for used cars are 18.6 per cent lower than what they were at their peak in May 2022, however, they are still 44 per cent higher than the pre-pandemic level in June 2019.

Current government monetary policy and the state of the economy have impacted used car prices. High borrowing costs have eroded disposable income and undermined consumer confidence, both contributing to the slower decline of used car prices.

Moody’s Analytics doesn’t anticipate further interest rate hikes; however, they also don’t expect a reduction in the cash rate until later in the year therefore predicting that household spending won’t increase significantly for the remainder of the year.

Car production in China increased 11.6 per cent in 2023 while Japanese production was up 18.2 per cent. The higher volume of cars is expected to put further downward pressure on used car prices.

Australian Automotive Dealer Association (AADA) CEO James Voortman said that car buyers were benefitting from a greater variety of used cars for sale at a lower price however there hasn’t been a surge in sales despite this.

The June edition of the Automotive Insights Report (AIR) reported that vehicles that retained their values best were virtually exclusively small cars in the passenger segment.

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