Driveaway pricing is not your friend
Buying a new car is a big investment, so make sure you are asking the right questions.
Can I have a car lease but without the running costs included?
This is one of the more common questions we get asked each day and we understand why. It’s because people often make car buying decisions based upon the monthly finance repayment and don’t really understand the true cost of car ownership or perhaps it’s more convenient to ‘park‘ that internal dialogue for a later time.
The average research timeline for a new car purchase can span months. One of the first decisions you’ll need to address is pricing. How much am I willing to spend on my new car? And because most cars are paid for using finance, that conversation soon shifts to the affordability of monthly payments.
How much of my monthly income am I willing to trade out for my next car?
Here’s the deal – cars are expensive and they go down in value (quickly). Think about how the car industry sends us pricing signals to inform our buying decisions. The main numbers they have us focused on are the car purchase price and the monthly finance repayments.
Visit your favourite car buying app or open any weekend newspaper – it’s all about driveaway deals, 1% car loan offers and low monthly payments. It’s where ‘they’ want us to focus our attention, but the numbers are less helpful for the consumer.
What if we replaced the price banners with a cost per km rate? What if we replaced the car specifications sheet with a summary of estimated running costs based on low, average and high km usage? What if the cost per km also included the cost of finance? What if every car was advertised with a projected value after 3 years? How would this data inform our buying decisions?
“Hi, my name is Jane. I’m looking for a 3 year/40,000km plan and have
a budget of 80 cents per kilometre. What can you show me?”
At Lendly, we work with our customers to better understand the total cost of vehicle ownership to better inform their buying decisions. Sure, we look at the purchase price but it’s not the only pricing signal we focus on. We calculate the total cost of ownership over the life of the lease including estimated running costs, cost of finance and future value of the car.
When you pay for your car’s running costs from your pre-tax salary, this allows you to pay less tax and increase your disposable income.
Lendly Pay customers saved an average of $4,681 in FY19 – and we’re just getting started.