Should you buy a car in the EOFY sales?
There's always a lot of commercial hype clogging up the airwaves and the internet at the end of the financial year – and a lot of it comes from car dealers.
That actually makes sense, because car dealers are trying to rack up sales to add precious black ink to the account books before the new financial year begins.
In this climate, you can get a good price on a car. But be careful.
Watch out for zero percent finance deals
Desperate to close the deal, dealers have been known to throw out an array of low-interest finance options – including the ever-tempting zero percent finance offer.
It's always an eye-catcher, but in this case you should resist temptation. Our research has shown that such offers are rarely a golden deal, since dealers will invariably make up the lost interest in other ways – such as selling the car for more than they'd ask for without the zero percent finance.
Around this time last year we analysed straightforward car loans and highlighted the best offers we could find.
It's no accident that none of them came from the car maker's finance division. And take a look at why we think zero percent interest deals can be dodgy, whether you're buying a car or transferring your credit card balance to start the new financial year with a clean slate.
Ways you can save
Aside from the chance to buy big ticket items while retailers are keen to unload them (especially if you're a keen bargainer), the end of the financial year presents other economic opportunities as well.
While they won't drastically alter your financial life, these tips will save you or gain you a bit of money – never a bad thing for most of us.
- If you're inclined to donate to charity, doing it before the end of the financial year will have positive tax implications. You can deduct your contribution from any tax liability you may have or, if you don't have one, get a refund. All in all, it's a nice little government incentive.
- If you earn less than $51,021 per year (before tax) consider making an extra super contribution to get the government co-contribution. It starts at 50 cents on the dollar up to $500 a year if you earn less than $36,021 before tax and decreases incrementally up to the $51,021 threshold. It's not easy to set aside extra super contributions when you're on a fairly low income, but it's free money from the government if you can manage it – and free money is good financial planning.
- If you have income protection insurance, prepay your premium to get the tax deduction this year instead of on next year's return. And if you're in the market for income protection insurance, read our income protection guide on how not to get stiffed when it comes time to claim.
Is it really the ATO?
It seems there's a new ATO tax scam waiting to pounce at the end of every financial year – and the scammers are getting more sophisticated. In recent years the ATO has received tens of thousands of scam reports. Lots of them involved bogus emails from the ATO that look remarkably official – only they weren't.
One phone scam that has made the rounds in recent years has bogus ATO officers claiming you've committed tax fraud, threatening legal action, and demanding banking details.
For the record, the ATO always sends a letter first, and if it calls it will give you a number to call back so you have the opportunity to confirm it is in fact the tax collector.
If you're in any doubt about an ATO communication online or over the phone, call the ATO on 13 28 65 and ask them about it.