You're certainly familiar with the importance of proper timing in optimizing your truck's engine for better fuel efficiency and performance. Applying that same principle to purchasing a new truck could also yield benefits, both in terms of obtaining a truck loan and making the purchase itself. The question arises: Is now the right time to take action, or should one wait?
From our lending perspective, the query centres around whether there's a favourable or even better moment to secure truck finance. Could the present be one of those 'better' times to buy and borrow?
As COVID-19 stimulus measures like Job Keeper have recently wound down, localized outbreaks and sudden lockdowns continue to impact certain regions, and countries like India and Brazil grapple with new waves of the pandemic, economic conditions are under intense scrutiny. Attention is focused on the financial climate, as well as the ongoing effects of interest rates.
There are numerous factors to consider as a buyer. Timing considerations encompass both sides of your balance sheet: the potential savings on your costs and the potential gains in terms of income.
We provide an update and our perspective on several key areas that we believe our Jade Truck Loans customers should be monitoring. These insights aim to increase awareness and interest in light of the current economic landscape.
State and Federal Budget Gains
For truck operators, the Federal Budget presents a dual perspective – one that delves into the benefits directly impacting your business through tax cuts and potential cost reductions, and another that explores potential opportunities stemming from government investments in the sectors your customers or market operate within. This analysis involves understanding how the budget affects your business and what potential growth it might generate for your customer base.
While the focus often centers on the Federal Budget during this time, astute operators recognize the importance of keeping a watchful eye on state budgets as well. State budgets typically outline specific infrastructure projects that could translate into new work opportunities for you, thereby prompting the need to upgrade your fleet. Additionally, states manage payroll tax, which can be a significant cost factor for many businesses. Given the pandemic, all states either deferred or waived payroll tax during the previous financial year. Monitoring state budgets will provide insights into their ongoing strategies in this area.
When observing budget announcements, timing is crucial. Many spending plans encompass a timeline and could be allocated over multiple years, possibly diluting the sense of urgency. Others might not be immediately introduced. Take, for example, the Federal announcement on reducing childcare costs, which garnered significant attention. However, the implementation won't take place until 2022. If you were banking on these savings for your household, patience is necessary.
On a related note, the Chief Minister of the Northern Territory presented the territory's 2021/22 budget on May 4th. The allocation of $120 million for local jobs and $15 million for new land releases suggests a potential increase in home building activity over the forthcoming years. This can signal opportunities in the construction and transportation sectors. More info.
The upcoming budget releases are as follows: the Victorian budget is scheduled for May 20th, while those of NSW and Queensland are expected in mid-June. Other states and territories will likely follow a similar timeframe.
The Federal Budget is set to be unveiled on May 11th. In his pre-budget speech on April 29th, the Treasurer didn't reveal much. However, since then, some measures have been disclosed, such as a substantial boost to excise tax benefits for small brewers and distillers.
It's essential to remain updated on the announcements and keep an eye on our articles for the latest information. If the budget measures hint at potential increased work opportunities, acquiring a new truck or expanding your fleet could position you more favourably to secure contracts and complete projects more efficiently. This strategic move could align your business with the emerging trends and demands in your sector.
Avoid Complacency
Timing plays a crucial role in making financial decisions, and it's important to consider the broader economic context when determining the right time to act. In its May 2021 meeting, the Reserve Bank of Australia (RBA) revised its economic forecasts, particularly in relation to inflation and employment. Despite these adjustments, the RBA chose to keep the official cash rate steady at 0.1%. The central bank has reiterated its commitment to maintaining low interest rates until specific targets for inflation and unemployment are met.
In this uncertain environment, it becomes even more critical to make informed decisions, especially when it comes to financing major purchases like a truck. Jade Truck Loans offers fixed truck finance & leasing interest rates, which means that once you secure a loan at the current low rate, that rate remains constant throughout the loan term. This provides you with the assurance that your interest costs will not be affected by any unforeseen increases in lending rates.
By locking in a fixed interest rate, you can take advantage of the current low-rate environment and ensure that your financing remains cost-effective and predictable, regardless of potential fluctuations in the broader economic landscape. It's a strategic move that offers stability and financial protection over the life of your loan.
EOFY Timing
The end of the financial year is a major timing consideration for truck buyers. Capturing discounts with EOFY sales and realizing any accounting gains through tax deductions in the current financial year, or should you buy after 1 July and realize the tax gains in the next financial year? If you're considering purchasing a new truck and need financing, timing is crucial. Explore options like Truck Finance With No Deposit Down or Commercial Vehicle Finance to ensure you make the most of these opportunities. Getting the timing right when purchasing a new truck can deliver significant gains for your business, so watch the clock!
Call 1300 000 003 for lending enquiries today.
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.
