Gold Coast car dealers see brighter June for sales following ‘terrible’ April with massive plunge in car loans

Gold Coast car dealers are seeing signs of improvement after loans plummeted in a coronavirus-plagued April.

GOLD Coast car dealers are seeing signs of improvement after loans plummeted in a coronavirus-plagued April.

Loans for road vehicles fell by 37.8 per cent that month, Australian Bureau of Statistics data shows.

Von Bibra Group general manager Wade von Bibra, whose dealerships sell Honda, Mitsubishi and Holden, said it was becoming more difficult for consumers to get car loans.

“May and June are our busiest months of the year,” he said.

“The challenge has been while a lot of people are keen to buy a car, we’ve been unable to get them finance approval because the finance companies are very cautious around anyone on a JobKeeper allowance.

“It is harder than ever to get people approved for finance.”

Von Bibra Group general manager Wade von Bibra

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Peter Lynton, principal dealer at Gold Coast MG, said lenders want more detailed information from borrowers.

“Lending has become a longer process because of COVID-19,” he said.

Mr Lynton said April and May were “terrible” for new car loans but he was optimistic it would improve this month.

He said lenders were reluctant to lend to anyone on JobKeeper.

“That says to the lender that the business has declined so they are more cautious to lend that person money.

“Even if their job is secure they are being now scrutinised more.”

Gold Coast MG Dealer principal Peter Lynton and sales manager Jack Pickering. Picture: Jerad Williams

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Mr Lynton said his dealership had seen a big decrease since COVID-19 going from 35 to 40 sales to just 12 in one month alone.

However, he said June had seen a huge spike in sales helping to offset losses in April and May.

Rebecca Frizelle, the chief operating officer of Frizelle Automotive Prestige and key shareholder in Frizelle Sunshine Automotive, said the Federal Government’s instant asset write-off (limited to $57,581 for vehicles) was a big boost to the sector.

“April was very challenging and we certainly saw finance acceptances down but we saw good solid gradual improvement in May,” she said. “June has been particularly solid compared to previous months and it is exactly what we needed to turn around what has been the industry’s 24th month of negative decline.

Rebecca Frizelle of Frizelle Sunshine Automotive.

“We entered COVID in a distressed state. The stimulus we are seeing now is helping us recover what we have lost.”

Ms Frizelle said buyers were benefiting from record-low interest rates, however lenders were looking more closely at finance applications compared to the past.

“That’s purely because they have to do the right thing. Each financier has a COVID-19 protocol just to check people are not in distress,” she said.

“They are reasonable as well and understand people have had to make adjustments in their livelihoods but they are being very thorough.”

Ms Frizelle said buyers should act now as imports were running low hitting stock levels.

“If people are thinking of buying before the end of the financial year they need to do it now because there is a shortage of stock.”