The Best and the Worst Time of the Year To Buy a New Car
Whatever your reason for buying a new car — it’s your first set of wheels, your family size has changed or your old vehicle has become a liability — timing is everything. Although a major part of your search for a new car will likely revolve around the make, model and style of vehicle that appeals to you, affordability and availability are important, too.
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When looking for new car deals, timing can have a big impact on the overall price you’ll pay. In fact, waiting just a few months before making that purchase can save you money, according to car-buying experts. When your need for new transportation isn’t urgent, exercise a bit of patience and you’ll likely score a much better car deal. Here’s a look at the best — and worst — times of the year to make a vehicle purchase.
The Best and the Worst: Buying a New Car in a Post-Pandemic Economy
Effects of the pandemic continue to plague the auto industry with a looming recession, a tight labor market and semiconductor shortages. As a result, inventories are sparse and prices are high.
In February, domestic auto inventories reached their lowest level since tracking began in 1993, according to U.S. Bureau of Economic Analysis data. While up slightly since then, inventory is still down nearly 500% compared to the 2020 recession’s midway point. Inflationary pressures have driven new car prices up 42.5% since February 2020, a JPMorgan analysis revealed.
Unmet demand for new cars has resulted in a surge in used-car prices, which means this could be a great time to buy a new car if you have a high-value used vehicle to trade in and are flexible about what to trade it for and when. It could also be the worst, with lack of inventory making it impossible to find the car you want — or pushing the price beyond your budget.
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The Best Time of Year To Buy a New Car
Economic challenges aside, car-buying experts say you can typically save some money by buying a new vehicle at a specific time of the year, month, time of day or even day of the week. Timing your purchase accordingly could really be worth it. Here are the best times of year to buy a new car:
1. At the End of the Month
This tip applies to any month of the year, so if you’re really in a pinch to make a purchase soon, this can increase your chances of saving money. The customer who comes in ready to buy at the end of the month might get a better deal if it helps put the manager over the top for their quota, said Mike Rabkin, owner and founder of From Car to Finish, a national new car deals negotiating service and information provider.
“When a vehicle needs help selling, the end of the month is a good time to buy if negotiating the vehicle yourself, because sales managers at dealerships have a monthly quota to hit and get compensated on whether they hit it or not,” he said.
Tip for this tactic: Brush up on your negotiating tactics before you make an appearance on the dealer’s lot at the end of the month.
2. When Models Are on the Way Out
When new vehicle models come out, dealers are eager to get in with the new and out with the old. So it pays to watch the life cycle of your desired vehicle and pull the trigger to buy right before the next best thing comes out.
“End-of-model-years — leftovers — get the best discounts, as the dealer is paying to inventory these units, and they need to free up space and cash for incoming, newer models,” said Albert L. Engel, executive vice president and chief retail lending officer for Valley National Bank.
Edmunds reports that December is the perfect time to get the best car prices because the last month of the year has the highest discounts and incentives.
Tip for this tactic: Pay attention to sales when older models will likely go down in price.
3. At the End of the Day
New car deals that can be found at the end of the day, or even on a specific day of the week, can also yield savings, according to car-buying website AutoTrader. Sales and finance professionals are ready for quitting time, but an eager salesperson will not let a serious customer walk away without buying.
The day of the week can also play into pricing. The latest TrueCar study found that Sunday was the best day of the week to purchase a vehicle, with discounts averaging 10%, and Thursday was the worst day to buy.
Tip for this tactic: Know which vehicle on the lot you want, then swing by the dealership just before closing.
4. Black Friday
On Black Friday, most shoppers are focused on tackling their holiday shopping list. But you might want to hit the dealership that day if you’re in the market for a new car.
Car dealerships’ Black Friday deals could also help you score discounts and incentives on par with the amazing deals you can find at major retailers, according to Edmunds. Several events line up in the buyer’s favor: Dealers are trying to clear out older inventory for the new year, as well as trying to meet quotas at the end of the month. Also, because most shoppers are at the stores, you probably won’t be fighting a crowd at the dealership.
Tip for this tactic: Because Black Friday signals the end of the model year, focus your search on outgoing models for the best prices.
5. When a Rebate Is Being Offered
Sometimes dealers offer temporary rebates in order to clear out a model year entirely during specific days of the year, Rabkin said. This could get you considerable savings.
“These days can take place at any time of the year … so dealers can sell a vehicle for less when they have the use of said incentives,” he said. “These can be in the form of a flat rebate per vehicle sold, or a stair-step incentive, which requires a dealer to hit a preset sales target set by the manufacturer, based on a specific dealer’s normal sales volume.”
Tip for This Tactic: Edmunds offers an online search tool to find rebates and incentives by ZIP code and vehicle make.
The Worst Time of Year To Buy a New Car
There are certain times that car-buying experts say are the worst times of the year to find new car deals. These days, most would probably agree that it’s any time during a pandemic or its aftermath.
Current economic challenges notwithstanding, these are the worst times of year to buy a new car:
1. When a Vehicle Is in High Demand
Like with many commodities, buying a new car when it’s in high demand might not be the wisest decision. That’s when car dealers and manufacturers have the upper hand.
“The best time to buy a new vehicle will vary depending on the supply and demand of a vehicle,” Rabkin said. “If it’s in demand and selling faster than they can get them in, it’s a seller’s market, and there is no best time because the dealer sets the price if they have what everyone wants.”
Tip for this tactic: Consider repairing your current vehicle first, or tightening your budget for a few more months to hold off on the purchase of your new car.
2. Following Recent Credit Inquiries
Auto dealers will check your credit score before negotiating terms if you plan on financing your new ride. Say you go to one auto dealer and apply for an auto loan but don’t like the interest rate you’re offered. You can go to another dealer or two and apply for loans as long as you do so within a 14-day window of the first inquiry, according to consumer credit bureau Experian.
By doing so, the credit inquiries basically all count as one inquiry. Waiting several weeks or months and then applying for another loan, however, will count as an additional hard inquiry and could have a negative impact on your credit score and the loan rate you are offered. In short, to save the most, plan your applications and credit checks strategically, or hold off until you are certain you will buy no matter what the terms offered.
Tip for this tactic: Don’t agree to a dealer’s credit check until you are ready to finance your purchase.
3. In the Spring
When considering when to buy a new car, you should think twice before purchasing new wheels in the spring, according to USAA. Winter weather is no longer an issue, tax refund season is in full swing and the summer travel season is on the horizon — all of which are conditions that make people more likely to be interested in buying a car. And when a dealership has an increase in willing customers who are ready to buy, it isn’t as likely to offer frequent discounts and incentives.
Tip for this tactic: Instead of blowing your tax refund on a new ride, put that money into savings until new car deals emerge later in the year.
4. At the Beginning of a New Model Year
Although the sleek new body design on your desired vehicle might be enticing, think twice before shelling out top dollar for a few extra curves or driver perks. Underneath the vehicle might be exactly the same, but what meets the eye often comes with a higher price. Carefully consider changes between model years and decide whether a new perk, such as heated seats, is really worth shelling out extra dough.
Tip for this tactic: Websites such as Cars.com offer comparison tools to help you determine what has changed during each model year a vehicle is made.
5. Before a New Model Has Been Reviewed
To avoid a lemon when you buy a new car, it’s a good idea to wait until new models are reviewed by an independent agency such as Consumer Reports. The 2022 report ranked the Toyota Avalon hybrid the most reliable.
Tip for this tactic: Practice patience and wait for the pros to review your ride before you buy. Consumer Reports typically releases its list of the most reliable cars in November of each year.
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Holly Hammersmith contributed to the reporting for this article.
Information is accurate as of Nov. 28,2022.
This article originally appeared on GOBankingRates.com: The Best and the Worst Time of the Year To Buy a New Car
