With The Delay In New Car Shipments, Consider Switching Out Your Balloon Payments

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With The Delay In New Car Shipments, Consider Switching Out Your Balloon Payments

For the past couple years, we’ve been going through a dry patch. Nope, not in terms of rain – we’ve been good on that front. The dry patch we’re referring to is all about new cars.

It’s been tough getting the car you want in Australia, thanks to a global shortage in semiconductor chips which all cars use. And it can also be tough getting the right finance for it. But don’t stress on that front because, today, the team at Carbroker.com.au provide some top tips on navigating finance during the chip shortage.

Oh, and if you came here to learn about Doritos, you’re in the wrong place.

Switching out your balloon payments

There are plenty of reasons to switch out balloon payments for alternative options when navigating the delay in new car shipments. Here’s why:

  • Riskier option
    In a time of uncertainty, the last thing you want is more uncertainty. That’s what comes with balloon payments if you’re not 100% sure that you’ll be able to afford it when the time comes. And if you’re not buying the car of your dreams (because of the delay in new car shipments), then why increase the risk for a car you may only have for a year, two years or three years?
  • Defaulting on your balloon payment isn’t great
    If you default on your balloon payment, there are a couple of negative implications. For one, you may have to refinance it, leading you into a cycle of debt. For another, you may be forced to sell the car, leaving you without a car and still in debt. The loan provider may not approve of refinancing if you default the first time.
  • What if an ever better car becomes available?
    Let’s say you’re thinking of upgrading, but your dream car isn’t available due to the new car shipment shortage. If you go all out on a loan with a balloon payment for a car that your heart isn’t totally set on, you could be risking a lot for something that doesn’t matter that much to you.


There are a few alternatives to agreeing to a balloon payment in order to secure your next car. A novated lease is probably one of the most practical options.

A novated lease is when your employer agrees to lease a car on behalf of you, with the repayments coming out of your pocket. The beautiful thing about a novated lease is that the repayments come from your pre-tax salary, allowing you to see a big benefit in the reduction of your payable tax at the end of the financial year. And if you want to switch cars when a better one becomes available, you simply transfer your lease.

Still not sure of which option of finance is best for you? Get in touch with the team at Carbroker.com.au. They’re Australia’s expert team in car brokerage, finance, insurance and more