The Best Time to Buy
The end of the year, particularly December, is widely considered one of the best times to buy a car. Dealerships and salespeople have monthly, quarterly, and annual sales goals to hit.
As the year-end approaches, they're often more motivated to close deals, even if it means accepting a lower profit margin on a single vehicle.
Specific days, like New Year's Eve and the last few days of the month, can be especially good for negotiation.
While December is prime time, other holiday weekends throughout the year, such as Memorial Day, Labor Day, and Black Friday, also offer promotional deals.
These events can provide a good opportunity to find a discount. The period from late fall through the end of the year is also when new model year vehicles arrive, pushing dealers to clear out the previous year's inventory.
This is the perfect time to find a great deal on a car that's still new but from the outgoing model year.
New vs. Used: Which Offers Better Holiday Deals?
Both new and used cars can have great holiday deals, but for different reasons.
New Cars: Automakers often offer special incentives on new vehicles to help dealers hit sales targets. This can include low or 0% APR financing, cash rebates, or lease specials. If you have good credit and want a new car with the latest features, this is a great time to take advantage of attractive financing.
Used Cars: The used car market gets a boost during the holidays as a high volume of trade-ins from new car buyers creates a surplus of inventory. Dealerships are motivated to move this stock quickly, which can lead to lower prices. If you're in the market for a used car, looking from late December through January can be very beneficial as dealers try to clear out older trade-ins to make room for new inventory.
In general, a used car will almost always be a better financial choice due to rapid depreciation of new vehicles, which can lose a significant portion of their value the moment they're driven off the lot.
However, new cars offer the peace of mind of a full manufacturer's warranty and the latest safety and technology features.
Your Holiday Car-Buying Game Plan
To make sure you get the best deal and don't fall for holiday hype, you need a solid strategy.
Do Your Homework: Before you even set foot on a lot, research the fair market value of the car you want on sites like Kelley Blue Book or Edmunds. Knowing what a fair price is will give you confidence during negotiations.
Get Pre-Approved for a Loan: Secure financing from your bank or a credit union before you visit the dealership. This gives you a clear understanding of the interest rate you qualify for and provides leverage when the dealer's finance manager presents their offer. You can then compare their financing terms to your pre-approved loan and choose the better option.
Negotiate the Out-the-Door Price: Don't get fixated on the monthly payment. Dealerships often use this tactic to disguise a higher total price. Instead, negotiate the "out-the-door" price, which includes all fees, taxes, and the cost of the car. This gives you the full picture of what you'll be paying.
Be Prepared to Walk Away: If a deal doesn't feel right, don't be afraid to leave. Salespeople are highly motivated to make a sale, and the power of walking away can sometimes prompt them to offer a better deal to get you to come back.
Avoid Unnecessary Add-ons: Be wary of extra products like extended warranties, rustproofing, or fabric protection. These often have a high markup and can be negotiated or declined entirely.
Potential Pitfalls to Avoid
While the holiday season is a great time to buy, there are a few common mistakes to be aware of:
Buying Too Quickly: Don't let the sense of urgency from a "limited-time offer" push you into a deal you're not comfortable with. Take your time and compare offers from multiple dealerships.
Falling for "Too Good to Be True" Deals: Read the fine print carefully. Some deals may come with hidden fees, require a specific credit score, or have other stipulations.
Overspending on Add-Ons: Dealerships will often try to sell you additional products like extended warranties, rust protection, or tire plans. While some may be useful, they often have high markups. You can almost always negotiate the price of these or purchase them from a third party for less.
By doing your homework and following these tips, you can take full advantage of the holiday season and drive away with a great deal on your new ride.
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