For many people, buying a car is one of the largest single investments they will make in their lifetime. This means that it’s wise to carefully plan for a new car purchase so that you can get the best deal and maximize your investment.
Part of the planning comes down to the best time of year to buy a car. Despite the price listed on the sticker, car companies and dealerships often will change how much they are willing to negotiate on price due to seasonal factors.
There are also factors such as new models being introduced and older models being phased out along with end-of-the-year discounts that can all lead to positive buying opportunities
In this article, we’ll look at a few of the key elements that can help determine the best time to buy a car along with the pros and cons of each.
New Model Releases
Knowing when new models are being released is an important step in determining how car companies will price their current inventory.
Generally, new models are introduced in the fall. However, savvy shoppers will know how much these new models will be different from the current year models.
Small changes instead of complete overhauls to the exterior and interior designs may make it so purchasing that older model at a lower price makes much more financial sense than the new model.
The downside here is you may not get the most recent iteration of the vehicle, so you’ll need to determine for yourself if that is worth the possible price penalty.
The largest discounts to the outgoing models are usually when the new model is offering substantial styling changes, such as a completely new body style or interior design.
But these major overhauls only happen once every few years, or even per decade. Many model-year upgrades are simply minor improvements that may or may not even interest you as a buyer.
Most car companies now follow a pretty standard routine of offering end-of-year discounts on almost all of their cars.
I’m sure you have no doubt seen car commercials during the holidays advertising this exact type of discount.
Many dealerships need to clear inventory at this time as well, so they are willing to make more deals or negotiate more attractive terms with buyers.
Also, salespeople are most likely looking to make as many sales towards the end of the year and the end of the month, so it’s a double incentive in some cases to close a deal with a buyer.
Salespeople and car dealerships often have internal monthly quotas, so the end of the month can sometimes be a great time to catch a dealership when they are more willing to offer discounts or free upgrades.
The Type Of Car You Want May Be Cheaper When Out Of Season
Although many cars are discounted at the end of the year, some specific models may be discounted at various other times based on the season.
For example, convertibles or sports cars may be offered at a discount during the winter, while SUVs and trucks will be at a premium.
Take this into consideration if you are looking for a specialty vehicle that is usually more in demand during a specific season.
The geographic area you live in will also play a role in how much of an impact the season has on pricing. Those in mild climates will mostly likely see far less of a swing in demand than those who live in areas with severe winter weather.
Finally, something we have seen recently is how gas prices can cause electric vehicles to be in much higher demand, which in turn raises their prices and reduces promotions.
If you’re in the market for an EV, higher gas prices can significantly impact what you’ll be paying at the dealership. So it may serve you to wait until gas prices recede from their highs before buying that EV you’ve had your eye on.
Take Advantage Of Financing Promotions To Save Thousands
Depending on your credit, the financing you secure for a new car could cost you thousands of dollars or save you thousands of dollars. This is why it’s so important to always be on the lookout for financing promotions.
Many car companies offer these promotions and some dealerships will do these on their own. Calculate the full ownership of the car, not just the monthly payments, and whether or not it fits your budget.
A great financing deal may save you more than just getting a little bit taken off the sticker price of the vehicle.
The end of the year is one of the most common times for finance promotions to be offered. But check your local dealerships and car manufacturer websites often when in the market for a car to find the best promotions.
Zero-Percent Financing Promotions
The best financing deal is generally the zero-percent promotion. These are becoming less common due to higher interest rates in the past year, but they can still be found for those with good credit.
To see how much they can save you as a buyer, let’s take a look at a scenario where $25K is borrowed for 60 months. With zero-percent financing, a buyer would save over $3K compared to a typical 5% APR loan. So these promotions are truly the king of financing deals.
zero-percent interest deals and promotions tend to peak in the summer months and taper off as the fall approaches.
Sometimes, dealerships will offer a form of zero-percent financing by simply covering the interest payments themselves. Although not true zero-percent financing, it’s essentially the same for the buyer assuming there are no catches.
But like regular zero-percent financing, these are less common as well in the era of higher interest rates.
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External Factors Can Impact Car Prices
Up until now, we have only discussed promotions and other internal factors when it comes to car pricing. But external factors have had a big impact as well, especially over the last few years.
Recent supply chain problems caused used car prices to spike. Those prices are now slowly starting to ease. But if you can wait out certain economic factors and stretch your current car for longer, it can sometimes result in savings.
Of course, there is a downside to this as you may not want to wait until certain economic factors change in your favor to own that new car you want.
Another possibility is that prices can go up even further for certain cars, as we’ve seen with various electric vehicles that have gone up as much as 15% due to component shortages.
So when using this strategy, make sure to understand as much as possible about the underlying factors causing prices to go up or down so you can be on the right side of the price move.
Consider Trade-In Values Of Your Current Car
We mentioned how used car prices have skyrocketed over the last few years, something you’ve no doubt noticed yourself.
This means that dealerships were also offering much more for trade-in cars. If you are in the market for a new car and used car prices are still elevated, it may be a good motivation to make the purchase.
Many used car prices increased over their previous year’s value, making their trade-in value that much greater.
Getting The Best Deal On A Car By Timing Your Purchase
As we’ve outlined, there are a few key areas to look for when finding the best time to purchase a new car.
These include things like the introduction of new models and how much they will be changed compared to existing models.
Next are seasonal promotions, the most common being end-of-year of sales that are often widely advertised and easy to find.
Finally, various seasonal differences make certain vehicle types more appealing during the summer or winter months. Also, various outside economic factors may influence prices and if you can wait them out, may offer substantial savings.
By tracking these key areas you should be able to find the best time to buy a car that also fits your schedule for when that new car will be needed.
By doing a little homework ahead of time, you can easily save thousands of dollars simply by waiting an extra few months to make your next car purchase.