December 2, 2023

Car Auto Finance

Car Auto Finance FOR Everyone

When Is The Best Time To Buy A Car?

With steep inflation and record-high vehicle transaction prices — up 3.8 percent since last year according to Kelley Blue Book — understanding the best time to buy can mean money saved. While there is no perfect recipe for scoring a good deal, some times are better than others.

The best time to buy a car is usually around the end of the year since salespeople will be trying to meet their quotas and may offer steep discounts. However, you should also consider holidays — like Black Friday —  and the beginning of the week.

Three of the best times to buy a car 

Timing is critical to buying a car. And certain months of the year and days of the week are better than others.

Monday can be the best day of the week to buy a new car. Other potential shoppers are often at work, so representatives at car dealerships are focused on anyone who comes in the door.  

“Come Monday, everyone has made a lot of good sales and enjoyed the activity of a busy weekend,” says Brian Moody, executive editor at Autotrader. “If you call or email a dealer on a Monday, there is a chance that you’re going to get either a better deal or simply more attention. If the person has more time, they might throw in something extra such as free oil changes or free car washes.”  

Bankrate tip

Research the vehicle you are interested in purchasing ahead of your trip to the dealership. This way you know what to expect for the out-the-door price.

In terms of the best time of the year, October, November and December are safe bets. Car dealerships have sales quotas, which typically break down into yearly, quarterly and monthly sales goals. All three goals begin to come together late in the year.  

“The end of the month, the end of the quarter, the end of any period is usually a good time to go,” Moody says. “That’s when there might be bonus opportunities for the salesperson or the dealer that give them extra incentive to want you to leave in a new car.”  

In addition to the end of the calendar year, it’s important to keep an eye on the end of the model year — when the newest versions will start hitting the road. Moody says manufacturers generally begin releasing new cars in fall, but there are some exceptions.

“If you pay a little bit of attention to see when the press is starting to share reviews about new cars, it means the release is imminent,” Moody says.

If you’re considering buying an older model, it’s wise to wait for the most updated version to roll out. 

“While you might be able to land a deal on the older model, it’s wise to consider holding out for the updated version. It’s very rare that an all-new version of a model comes out, and it’s $5,000 more,” he says. “It’s usually a few hundred dollars more, but it includes all kinds of new features and better gas mileage.”

Holiday sales can also offer deep discounts. Here are a few holidays that are especially great for buying a car:  

  • Presidents Day: The first few months of the year tend to be slow for all consumer activity, including auto sales, but some manufacturers work to spur spending over Presidents Day weekend.  
  • Memorial Day: Summer is typically among the most expensive times of year to buy a car, but dealers tend to cut prices back around Memorial Day. Next year’s models often trickle out around midyear, reducing the price of cars already on the lot. Beware of big crowds, though. As the weather improves, other buyers may be looking to score the start-of-summer deals.
  • July Fourth: Plenty of dealers will work to entice car buyers around the celebration of America’s independence. However, if you don’t need a car immediately, consider whether you can hold out for potentially bigger discounts available closer to the end of the year.  
  • Labor Day: The unofficial end of the summer is officially one of the busiest times for buying a new car. According to Zo Rahim, former economics and industry insights manager at Cox Automotive, the week of Labor Day accounts for more than 2 percent of all new car sales in an entire calendar year.
  • Black Friday: Car dealerships join the Black Friday sales craze, just like the rest of the retail industry. In addition to manufacturer-offered incentives, you may be able to get better deals from your salesperson. “For example, around Christmas, the person who’s helping you might want to get home to his or her family and be more eager to wrap up the sale,” Moody says.  
  • New Year’s Eve: If you can swing it, New Year’s Eve may be one of the best days of the year to shop for a car. Salespeople could be facing monthly, quarterly or yearly quotas on New Year’s Eve, and if they meet their sales goals, they could earn a hefty bonus. This could make finding a favorable deal easier.  

How to get the best deal at the dealership 

Regardless of when you decide to buy a car, you will need more than perfect timing to get a good deal. Consider the following tips to get the best auto loan rate no matter the calendar timing. 

  1. Know what you can afford. Calculate expected monthly payments to have a strong gauge of what you can afford. Analyzing your finances will help you know which rates you will qualify for. 
  2. Get a few quotes. It’s wise to get a few quotes from direct auto finance lenders. This way you can gauge if the dealer is offering you a good deal.
  3. Research. Do some upfront research on vehicles and lenders. On top of this do your homework to help you avoid common car-buying mistakes and give you negotiating power when you arrive at the dealership.
  4. Improve credit. While interest rates are based on a few factors, your credit score serves as a larger determinant of your APR. Take the time to better your credit before applying for loans to get the most competitive rate.

Bankrate tip

Some offers are specific to certain credit scores. Zero percent financing, for example, is best for those with excellent credit.

2022 car buying market considerations

Global parts shortages resulting from the coronavirus pandemic and supply chain issues have caused car prices to skyrocket. CBS reported that the shortage could continue through 2023.   

The J.D. Power predicts average transaction prices to reach $45,971 in the third quarter of 2022, which will be a 10.3 percent increase from the same time last year. A higher demand and a lower supply are contributing to this price increase.

Unfortunately, these supply chain issues will likely thwart any discounts drivers may typically benefit from this holiday season. Thomas King, president of the data and analytics division at J.D Power, notes that “The average incentive spend per vehicle is tracking toward $936, a decrease of 47.8 percent from a year ago.”

As dealers try to make back lost profits, prices will likely remain high. In October 2022, Kelley Blue Book found that shoppers in the non-luxury segment paid on average $690 above sticker price. These prices continue to climb for both new and used cars, according to Experian.

If you are looking to buy a new or used car, this lean inventory and competitive market will likely mean that you will pay a higher base price and receive fewer discounts until the shortage is resolved.  

The bottom line 

Waiting for the best time to buy a car requires patience. If you can hold off on a purchase, time can be your ally. Although pricing isn’t currently in consumers’ favor, keep an eye out for incentives and deals during upcoming holidays to maximize your savings.

Narrowing your top car choices and picking the right time of year to buy a car — or the right month or day — can help you save thousands.

Learn more

link