Is there really a best month to buy a car? Here's a look at the different times, seasons and ideas when buy a car.
There is nothing quite like that new car smell, though it can quickly be overwhelmed by the realization that you might have overpaid for the car. An automobile is one of the most expensive purchases most people make, one that usually stays with them through years of monthly payments. Nobody wants the joy of driving a car to be negated by the pain of paying too much for it.
Fortunately, there are many good deals when it comes to purchasing an automobile. There are rebates, zero-interest payments and other ways to save. Savvy shoppers can find a quality car at a good price, especially if they choose the right times to visit the showroom.
Buying a car is one of those rare occasions when procrastination can be a good thing. Some of the best deals can be found by waiting until the end of the month or, better yet, the end of the year.
Most dealers work on a monthly bonus system, where if they meet certain sales goals within a month they receive a bonus check. If they are just short of reaching that goal two or three days before the end of the month, then there is extra incentive for the dealer to make another sale. For example, if they are one car short of reaching a $2,000 bonus, then it would still be worthwhile for them to knock $1,000 or even $1,500 off the price.
However, if a dealer has had a particularly good sales period and has already reached the bonus number before the month ends, then the primary motivation for slashing prices has been removed. So it is possible that the same dealer offering discounts at the end of one month might not budge on the price the following month.
A better option might be to wait until the end of the year, when there could be even greater incentives for dealers to negotiate. Annual sales bonuses usually are significantly higher than monthly ones. So once again, if a dealer is close to reaching a sales goal that triggers a substantial bonus, then there is incentive to slash $2,000 or $3,000 off the price.
In addition, dealerships are sometimes desperate to clear the lot of that year's models to make way for the latest and greatest offerings, which usually begin arriving in September and October. Unlike wine, unsold new cars do not age well. When the calendar flips, all those vehicles are suddenly a year old. Yet in reality they are still basically new cars with hardly any miles on them. Unless a manufacturer had made a major design change with a model, the practical difference in cars from one year to the next is slight. But the difference in price can be significant.
The worst time of the year to buy a car, particularly a used one, might be during the spring. Tax refund checks are rolling in and people start driving more as the winter weather fades. With extra cash in hand and warmer days ahead, more people are looking to buy a car. And more shoppers means more opportunities for dealers to sell without needing to offer discounts.
Like most products, the price of a car depends partly on whether it is a buyer's or a seller's market. Whenever dealers have extra incentive to sell, that's the best time to buy.
This information is general in nature, is provided for educational purposes only, and should not be relied on or interpreted as accounting, financial planning, investment, legal or tax advice. Regions neither endorses nor guarantees this information, and encourages you to consult a professional for advice applicable to your specific situation.