Here’s why buying a car in December is a smart move

December 7, 2022 FA8Dd 0 Comments

What is the best time of year to buy a car? Let’s see what all the experts are saying.

Edmunds: “The data shows that December is the best time of the year to buy.”

Autotrader: “The best time to buy a car is at the end of December, when annual, quarterly and monthly sales targets converge.”

Cars.com: “Buyers looking for the best deal on a new vehicle are generally advised to wait until the end of the year.”

Carfax“The time of year you buy a car matters, and analysts agree that consumers buying a car in December could get the best deals of all.”

Hmmm, how about that? IT’S ALMOST LIKE WE FEEL A THEME HERE. It seems like December is the best time of year to buy a car, as long as you’re looking for the best deal, that is.

And getting the best deal possible is key because cars are getting ridiculously expensive these days.

In fact, the average posted price of a new automobile has just reached an all-time high of nearly $46,000, according to market research firm JD Power. Cars and trucks have never been so expensive before, and all this sticker shock helps explain a few other pertinent facts:

We all drive our cars for as long as possible. The average age of vehicles in circulation just reached an all-time high of 12.2 years.
We’re making car payments for longer than ever. There has been an increase in the number of car buyers taking out six- and seven-year loans, instead of the traditional five-year car loan. In fact, the six-year auto loan has become the most popular option, with the seven-year loan coming second, according to Edmunds.

What does all of this mean to you? Let’s review the details.

Why December? And when in December?

Traditionally, at the end of December, automakers offer their most generous sales incentives, such as cash rebates or zero percent financing, according to Cars.com. This is also when dealers are most likely to give you a bigger discount off the list price.

If you’re looking for a bargain, try the year-end sales events at dealerships in your area.

“Automakers and dealerships want to end the year with strong sales,” Edmunds says. “They also want to get rid of the previous model year cars that are taking up space, so they’re motivated.”

Dealers and sellers will be in the mood to negotiate because they are trying to meet their quotas. After all, there are year-end bonuses at stake.

“The biggest deals are usually to be won on New Year’s Eve”, Carfax advises. “If you can’t come on New Year’s Eve, the best days to visit a dealership are December 24 and December 27-30. Christmas Eve, when customer volume is low, is especially good. »

What if you’re not ready to buy now?

Of course, you might not buy a car this month. Maybe the holidays are tearing you apart. Maybe you’ll go broke paying for Christmas. It may be too cold outside. Or maybe your current car is purring like a kitten and you’re not quite ready to replace it.

No problem! December is not the only good strategic time to buy a vehicle.

Just generally try month end or quarter end. Dealers and salespeople usually have monthly or quarterly sales targets, and they often receive a bonus for hitting their targets, Carfax says.

Can’t buy cars at Christmas or New Years? Try a different vacation instead.

“Many other holidays on the calendar work to your advantage when buying a car,” Autotrader advises. “Dealers use just about any holiday with a three-day weekend, like Presidents Day, Memorial Day or Labor Day, to entice potential car buyers.”

Navigating the complexity of today’s auto loans

At your local car dealership these days, incredibly high sticker prices make it tough.

For example: Financial experts recommend prequalification for a loan at a bank or credit union before going to a dealership. This way, you can compare your bank’s offer with that of the dealer for better negotiating leverage.

However, we have received reports from car buyers who found that a dealer would not sell them the car they wanted unless they opted in with dealer financing. Now, how firmly they stick to it will depend on the dealership. Prepare for this.

The stakes are high here. The terms of your auto loan are very important because you are likely going to have to make car payments for a long time.

To offset the high cost of today’s cars, more and more people are extending the term of their loan to lower their monthly payments. A five-year car loan used to be the norm, but now it’s the exception. Today, almost three-quarters of all new car loans have terms longer than five years, according to Edmunds.