As the government struggles to balance the books after inheriting a ‘structural deficit’, second-time-around leasing is gaining favour.
The text book Economics by Roger A. Arnold says that a cyclical deficit is a deficit caused when government revenues drop and expenditure rises in response to an economic downturn. They’re quite normal and don’t last.
But a structural deficit is caused by regular government overspending (spending more than the government receives in revenue) that persists over the course of several or many business cycles.
The result of living beyond our means is that New Zealand has gone increasingly into debt and therefore has a higher interest bill to service.
This is the situation the current government is trying to get on top of, and why the Reserve Bank has kept the Official Cash Rate (OCR) at a stubbornly high 5.5%. The OCR won’t come down until inflation is under control.
Are car sales slowing down in NZ?
The sluggish economy means that times are tight and the new car market is at a cyclically low ebb.
NZ Autocar reports that new car sales are slowing down in NZ and remain subdued. Sales data shows the overall market in April was down 9% on previous year and YTD was down 10%.
The decline on 2022 and 2021 is even greater at -23% and -27% respectively.
It’s not just new cars either. The retail and real estate sectors are also subdued.
“With the Government setting an agenda of austerity and job cuts, it’s only natural that this negative sentiment will flow through to the markets,” says Autocar.
What does this mean for you?
The rise of second-time-around leasing
With some businesses finding it hard to justify a new vehicle, especially for less-senior roles, we are seeing second-time-around leasing gaining favour.
Ex-lease and second hand vehicles can both be leased through Driveline, not just new vehicles. This is what is colloquially known as second-time-around leasing.
If you’d like to get a feel for what’s available, we currently have 95 vehicles listed on our Ex-Lease & Used page.
Cash is king, and even more so in difficult times. Going for the second-time-around leasing option is a great way to keep your precious capital in the bank and reduce your FBT costs.
If the thought of committing to a brand new vehicle is doing your head in right now, give us a call and tell us what you need.
We’ll scour the country to find the right vehicle and set you up with an affordable second-time-around leasing payment plan.
