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Tax break drives sales

26 Jun, 2009 10:35 AM
LOCAL car sales are booming. And no dealerships reported needing to apply for government support to keep them afloat.

Inverell car dealerships have reported one of their best months for sales in a long time, much of it credited to the Federal Government’s stimulus package offering a 50 per cent tax rebate for eligible buyers of new cars bought before the end of the financial year.

David Dimmock, new car sales manager at Gaukrogers Inverell, said this week that June this year has been one of their best ever across all three franchises.

“It has been a booming June for us,” he said.

“There has been a real rush on new vehicles and it has been a good end to our financial year.”

Mr Dimmock said the used car sales had also improved and were continuing to do extremely well.

“The government’s tax break, with a 50 percent tax incentive claim for eligible buyers, has spurred a lot of sales on.

“Our workshops and parts departments have also exper-ienced a sharp increase in business,” he said.

“Absolutely mad,” is how sales manager Adrian King from Barry’s Motors in Inverell describes recent weeks.

“This investment allowance incentive and tax rebate has meant that we have been doing great business, unexpected business,” he said.

“It seems to have rubbed off on other things as well, as other areas of our businesses are also experiencing a boom.”

Mr King said a downfall has been stock availability, or rather the lack of stock, to meet demand here.

Manufacturers cut back on some vehicle models, not expecting the economy to pick up so soon.

This has resulted in some high demand vehicle models having a longer waiting list as dealers try to source more stock to meet the demand.

“The expected downturn in the marketplace meant that insufficient stocks were ordered because it was not expected that sales would be high.

“This means that stock has been a bit harder to get.”

But they are still selling fast and furiously.

“For example,” Mr King said, “I average about one of a particular model of vehicle per month.

“This month I have sold four.”

None of the local dealerships spoken to reported applying for or requiring any form of government funding assistance to keep afloat under the Ozcar scheme.

The Government introduced the scheme to support car dealers who may have been affected by the financial crisis.

But, the scheme is in danger of losing money because only a handful of dealers have needed to use it.

The scheme has sparked controversy as the Federal Opposition claim that Treasurer Wayne Swan personally intervened to try and get funding and for a car dealer friend John Grant.

Mr Grant was also in the news after lending a ute to the Prime Minister Kevin Rudd.

The smaller the total amount available to dealers through the Ozcar scheme the greater risk that taxpayers will lose money on it.

The Government introduced the scheme in December last year after finance companies GMAC and GE Finance stopped providing funds for dealers to buy cars for their showrooms.

The Government estimated OzCar could be worth up to $2 billion. But most dealers affected by the withdrawal of GE and GMAC have found other support. Now the maximum size of OzCar is likely to be about $450 million.

It’s a scheme that the Government could lose money on.

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Business is booming: David Dimmock is pleased with the number of car sales locally.
Business is booming: David Dimmock is pleased with the number of car sales locally.

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