- Despite the Australian economy entering its first recession in almost 30 years, there is cause for optimism if your business is in the market for commercial vehicles.
- The Federal Government are pushing for more independence in domestic supply chains. There is also a wave of government tax incentives and tax breaks, however, these won’t last forever.
- In this article, we delve into how COVID-19 has impacted commercial vehicle sales and why now is the best time to get ahead of the pivot to on-shore supply chains.
We all know the upheaval we’ve experienced due to COVID-19. As business owners, we are used to the boom and bust cycle; but we’d never expected something like this.
However, many businesses have cause for optimism. The retail model may be consigned to the past, and online shopping and deliveries may be the future finally catching up on itself.
According to the ABC, online shopping surged 80% during May in Australia, and this trend is likely to continue.
The next cause for optimism is the Federal Government’s push to build supply chain resilience and independence. That means more manufacturing stays on-shore. It also means that the supply chain will need to carry more materials and product to more places, and this will require more vehicles than ever before.
If we’re on the verge of a commercial vehicle boom, it makes sense to get an edge on the competition now. I’ve been writing for months about this – this is the best time to buy a commercial vehicle.
Commercial vehicle sales dipped by 0.6% over the previous year according to the Federal Chamber of Automotive Industries, but they were up by 11.6% over the previous year in October. The faster demand rises, the lower your chances are of locking in a real bargain.
How can I gain a competitive advantage in the commercial vehicle market?
There are 4 ways to gain a competitive advantage in the commercial vehicle market:
- Lock in the low-interest rates
- Take advantage of stimulus
- Write-off your asset purchase
- Look for a business-oriented broker
1. Lock in the low-interest rates
Interest rates are at record lows – 0.1% - and won’t stay that way forever. Lock in a five-year term with a chattel mortgage or hire purchase with the most competitive rate your business will ever experience.
2. Take advantage of stimulus
There is a raft of stimulus packages which your business can get on board with right now. The major initiative is the SME Coronavirus Guarantee Scheme. This means the government acts as your guarantor to finance up to $1 million in commercial assets. You can even get a six-month repayment holiday (subject to lender approval.)
3. Write-off your asset purchase
The government has also increased the threshold for the instant asset write-off to $150,000. That means you can buy vehicles and have it written off as a tax deduction. This will expire on 1st of January 2021 – so time is ticking.
4. Look for a business-oriented broker
Having a good relationship with a business-oriented broker who knows the ins and outs of all the stimulus and finance packages can be worth their weight in gold. Structuring chattel mortgages or hire purchases can help your business save on GST, interest, and depreciation – you can claim all these back or have the savings passed onto you from lenders.
Business brokers work to get discounts from fleet purchases and other industry incentives – so don’t miss out. This could be your opportunity to drive a bargain you and your business will never see again.
Will you take advantage of this boom in the commercial vehicle market? Share your thoughts in the comments below.
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