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Australia’s Personal Loan Interest Rates Drove Car Sales up in 2012

Australia’s Personal Loan Interest Rates Drove Car Sales up in 2012

The most recent set of data from the Australian Bureau of Statistics indicates several encouraging trends, albeit contradictory at times. For one thing, the personal loan market seems to have picked up some speed, in February, going up 2.8 per cent on the month. The seasonally adjusted volume of loans that month was almost $7.9 billion, compared to the $7.66 billion borrowed for personal purposes in January. However, the figures for new car sales lost ground in March, down to 95,113 new units sold, from the $95,716 in February.

The overall situation of the car sales segment in Australia remains positive for the twelve months up to the end of March 2013. There were 4.5 per cent more new cars sold in that interval than in the twelve monthsbefore it. Numerous experts are linking this positive trend with several factors: the increasingly lower rates of personal loans, the decrease in the E.U. market, the bank’s competitiveness in luring in new personal loan clients and, last but not least, the strength of the local currency.

In Australia, the wake of the recession has left banks competing for new clients on several segments, one of which is that of car loans. While the vast majority of lenders is offering personal loans, with fixed or variable interest rates, Bankwest is one of those specifically providing a car loan, with an 8.89 per cent secured rate, which allows the borrower to take out from $10,000 to $100,000. While the loan offers better rates for borrowers who are willing to secure the loan with their current vehicle, it also allows them to purchase any type of vehicle, be it new or used – and can even be employed to offset an existing car loan from a different provider.

Such banking products, propped up by a slight, yet constant increase in consumer confidence, are helping the car sales market as a whole. Even though new cars may not be selling as well as they used to, a recent report on the car retail industry in Australia speaks of record levels of profit in 2012. The total number of cars sold down under last year amounts to 1.1 million, up over ten per cent compared to the previous year. According to one industry official, it was a record-breaking year by all accounts, following up on a string of five years with record sales, out of the past six. Crossing the threshold of 1 million units sold surely is a milestone for the industry – one which ties in with various trends around the globe.

While car sales in China sky-rocketed, with 20 million units purchased, Japan saw a 27.5 per cent increase in sales volumes, and the United States an encouraging 13 per cent rise. Meanwhile, however, several major markets in the European Union reeled downward, under the effect of the lingering crisis in the old world. The German car sales market lost 2.9 per cent in sales, the French one 13.9 per cent, and the one in Italy a worrying 20 per cent. Since automotive producers were seeing some markets, with traditionally good sales volumes, going south, they pushed the pedal on sales in Australia – a country whose currency is going strong, personal loan interest rates improving, and whose consumer confidence levels are on the up and up.

The situation on the Australian car market is expected to shift, once Europe resumes its former purchasing habits, but for the time being, Aussie car buyers are enjoying offers left and right, both from banks, as well as from producers and dealerships.In other words, if you can afford to buy a car right now, there is probably no better time to do so.

Published by Valentine Belonwu

My name is Valentine, founder of this site, an entrepreneur working as a moderator at Bizsugar a small business community news site. Connect with me on Google+ at Valetine Belonwu

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