Australia's peak car industry body hopes easing lending criteria will offset declining car sales, with September marking the 30th consecutive month of declines.
According to the Federal Chamber of Automotive Industries' (FCAI) monthly 'VFACTS' report, 68,985 new cars were sold in September, which is 21.8% down on September 2019.
In the year to date, car sales are down 20.5% from the corresponding period in 2019.
FCAI chief Tony Weber said the industry is hoping for a positive turnaround because of two factors.
"First of all, we are seeing COVID-19 health restrictions across Australia, and particularly in metropolitan Melbourne, continue to ease," he said.
“Another sign that the market may improve is the announcement by the Federal Government last week of an easing of lending conditions for private buyers and small business in Australia.
“Freeing up restrictions around financial lending will act as a stimulus for Australian industry."
In the market for a new car? The table below features car loans with some of the lowest fixed and variable interest rates on the market.
The easing lending criteria places the onus on the borrower to be truthful in their loan applications, which would shorten the application process.
While it was announced with a focus on home loans, it would presumably also extend to the car loans sector.
FCAI said stricter lending criteria has been one of the "major factors" contributing to the decline in new car sales, along with coronavirus, bushfires and a weaker Australian Dollar at the start of the year.
While new car sales are down overall, the mix of types of cars on the road is changing.
SUVs with light commercial vehicles (i.e. utes) make up more than 70% of new car sales.
In the SUV space, light SUVs are up 11.4% on the month compared to September 2019, while upper large SUVs are up 4%.
These were two of the only three segments to experience growth, with the third being light commercial vans, up 4.5%.
In the passenger segment (hatchbacks, sedans), plug-in hybrid sales are also up 190.9% - albeit selling at very low volumes - as are regular hybrids, up 39.4%.
This was largely aided by popular green vehicles such as the Hyundai IONIQ (up 200%).
Fully electric vehicle sales were also up 41.2% in September, while hybrid SUVs also saw a 229.7% surge in sales.
The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered which includes retail products from at least the big four banks, the top 10 customer-owned institutions and Australia’s larger non-banks:
- The big four banks are: ANZ, CBA, NAB and Westpac
- The top 10 customer-owned Institutions are the ten largest mutual banks, credit unions and building societies in Australia, ranked by assets under management in November 2019. They are (in descending order): Credit Union Australia, Newcastle Permanent, Heritage Bank, Peoples’ Choice Credit Union, Teachers Mutual Bank, Greater Bank, IMB Bank, Beyond Bank, Bank Australia and P&N Bank.
- The larger non-bank lenders are those who (in 2020) has more than $9 billion in Australian funded loans and advances. These groups are: Resimac, Pepper, Liberty and Firstmac.
Some providers' products may not be available in all states.
In the interests of full disclosure, Savings.com.au, Performance Drive and Loans.com.au are part of the Firstmac Group. To read about how Savings.com.au manages potential conflicts of interest, along with how we get paid, please click through onto the web site links.
*The Comparison rate is based on a $30,000 loan over 5 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.
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