In addition to all the holiday decorations, social gatherings, and shopping mayhem, November and December are also peak months for car dealer ads.
“Best prices of the year,” they’ll say. And maybe they are. But just like Black Friday sales, it can be easy to get caught up in the hype, and then realize that maybe the sale price isn’t all that great a discount, after all.
Don’t get caught up in the great deal mindset.
Just like Walmart and Best Buy, car dealers like to have a great deal front and center, but when you look at the fine print, maybe there’s just “one at this price.” It’s not so different from the 55-inch LCD TV for $100—maybe there really were a few in stock, but they’re snapped up by the first few bargain hunters in line. But they served their purpose: they got a lot of other people to the store. And when we’re in “get a great deal” mode, it’s hard to walk away empty-handed.
So when we show up to a dealership to check out the car we want, after seeing it advertised at a huge discount, we’re already psyched up and often ready to drive home in our killer deal. Feeling that we got an exceptionally good deal that was just too good to pass up is a helpful way to justify a large purchase like a car. And dealers know this. And capitalize on it.
This means that sometimes you get to the dealership only to find out that the deal you saw was just on one car. Maybe it’s the orange one that they can’t sell. Or maybe it’s already been sold, because there was only one. There may be other, similar cars with the same discount, but they might be a lot more heavily optioned, so even at the sale price, they may be a lot more money.
Reasons it’s a good time to buy…
One of the reasons for the aggressive deals is the fact that most people aren’t focused on car shopping in December. Kids are out of school, everyone’s busy preparing for and attending holiday gatherings, family members are visiting, and shopping for gifts takes up time and budget.
In many places, the weather can also be a factor. It might be stormy and cold; not the sort of conditions that make people want to go out and traipse around car lots looking at options.
This gives you—the rare, intrepid car buyer who braves the elements and casts holiday obligations and budgets to the wind—a big advantage.
Something to keep in mind…
Remember that the reason dealers are so eager to clear out their inventory is that it’s last year’s models. In most cases, there are no major changes to the cars from one model year to the next, and won’t make any difference to you as far as the car you get.
But the value of a car that’s a year old instead of the latest model year is something you have to factor in. The value of a car that’s one model year older definitely takes a hit in terms of resale value. Whenever you decide to sell it, you’ll get notably less than if it were a model year newer. So be sure your discount is good enough to reflect that.
Also, if you’re planning to lease, it’s probably better to buy the latest model year. Even though last year’s model may be heavily discounted, the residual value (what your car is estimated to be worth at the end of the lease) will be considerably lower for a car that’s a year older. And that means your lease payments will likely be higher than if you buy the latest model year, even if the initial discount is smaller.
Don’t allow yourself to be rushed.
Remember that in most cases, the deals are really only going to get better as the end of the year gets closer.
A salesperson may try to maximize urgency by telling you these cars are going fast, and will be sold out soon. The truth is, they’re not flying off the lot. Especially in the slow sales month of December. And there will always be more. Unless you’re shopping for an extremely rare, low production car (in which case there probably won’t be end-of-year deals anyway) here are plenty of cars at dealers near you, and dealers around the country.
Don’t forget to consider buying used—just not from a dealer
Buying a new car rather than a used one is a matter of personal preference, and definitely has its advantages, if you can afford it.
But buying a used car with low miles can be an excellent way to save a lot of money. If you find the right one, it can be hard to distinguish it from new—and the original buyer will absorb the initial new car depreciation that hits all cars as soon as you drive off the dealer’s lot.
Buying from a private seller (an individual selling their car) rather than from a dealer lot is the best way to score a killer deal. Dealer pricing on used cars is generally not a good deal, and not worth paying even for the convenience/safety of buying from a dealership.
If you’re considering a used car that’s less than 2-3 years old and has reasonably low miles, remember that it’s probably still covered by the full manufacturer’s warranty. (Check to make sure.) That means that there’s no risk if something goes wrong with the car soon after you buy it, and therefore no need to buy a “certified pre-owned” (CPO) car from a dealer.
Some dealer CPOs add additional years to the warranty, but usually you can do better just buying an aftermarket extended warranty (called a vehicle service contract) for your used car purchased elsewhere at a much better price.
As far as safety goes, TRED can be an ideal way to find a great used car from a private seller. You can get a much better price than from a dealer, but you also get secure payment and financing options, CARFAX, a full mechanical inspection, and guaranteed title transfer, so you don’t have to worry about getting scammed.
Do your research. Stand your ground.
As with any type of negotiated transaction, be cool, and keep your emotions in check. Buying a new car is exciting, but you’re going to have to live with the monthly payment long after that excitement wears off. Make sure you’ve negotiated the best one you can.
Make sure it’s really a great deal. Go to sites Iike Edmunds, and TrueCar, to see what people have actually paying for the car you’re looking at—especially in your area. That way, you know what’s reasonable to expect. If you don’t get it, walk away. There’s always another dealer, and another day.
Often times, a dealer will call you back in a few days, or weeks, and agree to your price. Their need to move last year’s inventory is only going to get more dire as times goes on.
Remember that it’s you—the buyer—who are the rare commodity. The cars are just, well, a commodity.