Top Australian banks are now in a tight competition for offering the best car loans for the Australian market as the car sales, both for new and second-hand cars, increase.
COVID-19 pandemic caused many adverse changes in many countries globally. The most prominent nations, including Australia, are now on the brink of economic collapse due to unprecedented economic recessions. The country’s biggest banks have been warned of potential cliffs in the following months as many of their approved deferred loans for thousands of customers are at the risk of being delinquent. During the pandemic’s peak, the national government has initiated efforts that include various relief and ease of loan repayments. In the remaining months of the year, these government efforts are also set to cease gradually.
However, data show that during the pandemic outbreak, car sales in Australia also relatively increased. In June alone, the Federal Chamber of Automotive Industries reported a relative increase in the sales of new cars in the country, with sales totaled at 110,234 vehicles sold. This increase in sales is still 6.4 per cent lower compared with figures gathered from the same month last year. But these figures are relatively higher than in the previous months. June’s car sales boomed to 17.9 per cent compared with March, 48.5 per cent over April, and 35.3 per cent in May.
In an exclusive interview with the editor-in-chief of Carsales, Mike Sinclair, he mentioned that the number of Australians buying second-hand cars also plummeted. This data even prompted many advisors and experts to encourage Australians to sell their used cars or buy new ones, either used or brand new. Moody Analytics also presented data citing that the sales for used vehicles around the country have increased by 10.6 per cent by the end of May alone. The credit rating agency still expects these increased figures to remain in the coming months.
The increase in car sales in the previous months is seen to be a result of a combination of many factors, primarily the new set up conditions caused by the COVID-19 pandemic. The pandemic restrictions include limited access to public transportation, urging many Australians to resort to having private rides. When the lockdown restrictions eased, and the economy slowly opened, many working-class members relied on public transit to own personal cars.
The national government’s reliefs and efforts like loan payment packages and instant asset write-off offered to small to medium businesses also serve a significant role in car sales. Car prices also had a relative drop in the beginning months of the pandemic, having up to 12% price drop in car prices.
Additionally, during the lockdown period, internet users have more screen time, spending hours browsing through the internet and social media platforms. The increased number of audiences for sellers in the online platform also prompted better sales, not only for cars but also for many products online.
Given this increase in cars’ consumers, top Australian banks now compete in providing the best car loans and other financing offers for the Australian market.
The National Australian Bank (NAB) now advertises a personal loan that will help you meet your car purchase needs. NAB promotes personal loans with 13.56 p.a. of comparison rate for variable rates and 13.56 p.a. for fixed rates. This loan offer lets customers lend between 5,000 dollars to 55,000 dollars with term loans ranging from 1 to 7 years. It also allows redraws anytime for extra payments for variable rates. It also features flexible repayment options, allowing customers to personalize a repayment option that will best suit their budget and needs. For existing customers, NAB commits to finishing the application process within two hours.
The Commonwealth Bank of Australia also offers a secured car loan with an advertised fixed rate of 8.49 per cent and as low as 9.4 per cent p.a. of comparison rates. Customers can also have as low as 615.35 dollars of monthly repayment.
The Bank of Australia Used Car Loan also allows a flexible variable rate of 6.45 per cent and a comparison rate of 6.66 per cent, payable with 586.28 dollars monthly repayment. On the other hand, Australia and New Zealand Banking Group Limited (ANZ) now offers an online secured car loan payable with 608.15 dollars monthly repayments. The advertised fixed rate is at 7.99 per cent, while the comparison rate is 8.29 per cent p.a.
Beyond Bank Australia also now advertises a low rate car loan offer for its customers with only 5.6 per cent p.a. of comparison rate. The Canstar 5-Rating for Outstanding Car Loan 2019 awardee ensures convenient car loan application for its customers. This car loan offer features a flexible repayment term of up to seven years. Customers can borrow up to 100 per cent of their vehicle’s price, plus it allows redraws of payments and slashed fees for those who will pay early.
In the pandemic aftermath, global governments are now busy orchestrating recovery plans to alleviate the economy from its shrinkage. In recent weeks, the House of Representatives Finance Committee included Australia’s top banks in parliament sessions to lay out COVID-19 responses and proposed recovery plans. The Big Four appeared in the hearings with a list of enacted measures that include ease of loan offers, deferrals, and allowed maximum cash withdrawals. These banks, particularly NAB, also presented structured plans that may consist of tax and loan legislation as the next economic recovery step.