The Best Time To Buy A Car (When Is It Really?)
Timing Isn't Everything When You Are Buying A Car
It’s the end of the month, maybe the end of the year, and you are getting ready to head out car shopping because you heard that’s when the best deals of the year are. However, you get to the dealership only to find you are presented with the same sort of pricing and hassle you could have received any other day, in any other month, of any other year.
Are you being lied to?
Not really, you see: The truth is that to get the best deal on a car you DO have a better chance going to the dealership at the end of the month or at the end of the year than if you picked a day at random. However, the promise of saving money on a car has little to do with the timing, and more to do with WHERE you choose to purchase your next vehicle? Let me explain…
Article Highlights:
- Is There Really A Best Time To Buy Cars?
- What Makes Car Deals At The End of The Month or Year Possible
- Dealer Incentives and Your Bottom Line
- Right Now (2019) May Be the Best Time For You To Buy A Car
- Interest Rates Are Rising Fast For Everyone!
- The “Best Time” Car Buying List
- The Best Time Of The Day To Shop For A Car
- The Best Time Of the Week To Buy A Car
- The Best Time Of The Month To Buy A Car
- Best Time Of the Year To Go Car Shopping
- Worst Time To Buy A Car
- The “Secret” Best Time Of The Year To Buy A Car
- What Is the Best Time of Year To Buy A Used Car?
- The Ultimate Time To Buy A Used Car
- New Cars- Best Times To Shop
Is There Really A Best Time To Buy Cars?
The biggest myth around Car Buying is that you (The Consumer) can make the dealer do something they don’t want to do. If you get a deal, it’s because the dealer decided that selling you the car for that amount served their interests more than a higher profit, not because you figured out the best method to negotiate on a car.
Understanding why making less money, even taking a loss, can actually benefit a dealer is something I discussed more in depth in another article titled, “What is the MSRP Price of a Car”
But The Bottom Line Is:
A car dealership has certain times in a month, quarter, or year in which the incentives available to them from the manufacturer will land them a payday far (Very Far) exceeding anything they could possibly make or lose from selling you your car.
What Makes Car Deals At The End of The Month or Year Possible
Here is how the end of Year/Month car deal works:
A dealer may be promised a certain number and variety of incentives by their manufacturer for hitting sales goals and quotas (These are on top of profits made from each sale). For this particular example let’s say that a Ford Dealership is given a quota for selling a certain number of Ford F150’s. It’s a popular truck so this may not be a good example but let’s run with it!
The Math For Dealer Profits:
1. The dealer is told that if they can sell (Totally making this number up) 100 F150’s in January, that they will get a bonus of $100 per truck sold at the end of the month in a check= $10,000.
2. If they can sell 100 in Feb, March, and April- The same= $10,000 + $10,000 + $10,000.
3. If by the end of April (End of the quarter) they can sell a total 500 trucks for the quarter, they will get an additional $150 for each truck sold each of the previous 4 months.
– So, if they hit every bonus for F150’s that’s an extra $100,000. And Remember, that’s standard F150’s (Not F250’s. F350’s, Mustangs, ETC…)
Dealer Incentives and Your Bottom Line
Think about it: If a dealership stands to earn themselves a bonus of $100,000 by selling just a handful more of F150’s at the end of the quarter, what’s that going to mean if you want an F150? Big savings right? Heck, a dealer would even take a loss or two on a car to hit that bonus rather than lose it.
But Here Is the Catch:
- You are not going to know which dealer is just shy of a bonus because the people you deal with upfront (The Salespeople) don’t share in the manufacturer’s incentives.
- If the car the dealership needs to sell for a bonus isn’t the car you want: You are just a regular transaction.
Right Now (2019) May Be the Best Time For You To Buy A Car
How much would you pay for a car you didn't really want?
That’s the question you should ask yourself when you begin to think about using the “Waiting until the end of the month/year” strategy.
WAITING isn’t a good idea for everyone!
Because while you are waiting until the end of the year or month, other people are still buying cars, and they could very well be buying YOUR CAR! And remember, dealer inventory doesn’t work like the Truecar Car builder software- Dealerships order certain vehicles in certain trim levels and colors, AND THAT’s IT!
So, if you absolutely need a sunroof or that new safety feature, or if your favorite color is red and you can’t see yourself driving anything other than a red car, then this strategy isn’t for you.
Interest Rates Are Rising Fast For Everyone!
Maybe No One Should Be Waiting To Buy A Car...
That’s right- Those famous Zero Percent interest rates that began shortly after the Great Recession, and that have lasted for almost 10 years, are finally coming to an end as the Federal Reserve has announced a 2019 strategy to keep raising interest rates amid our booming economy.
The actual plan that the Fed has announced are for three hikes in the interest rate, which means if you buy now you could lock in a rate before it is raised 3 times. That could end up saving you at the very least a few hundred dollars, possibly even more!!
The "Best Time" Car Buying List
If you wait until the dealer meets their quota, you waited too long to buy a car!
1. The Best Time Of The Day To Shop For A Car
This is probably going to be the category with the most opinions, and to be honest: No one will be right or wrong.
That being said, the best time of the day to shop for a car is probably going to be toward closing time. Don’t get me wrong, dealers are not more willing to take a loss simply because they want to go home, so when people tell you that you can get a deal because the dealership staff is tired- They’re misguiding you!
2. The Best Time Of the Week To Buy A Car
The best time of the week for car shopping, or rather the best day of the week, is partially going to depend on the calendar and what days of the week the final days of the month might fall on. However, in an average week, your best day to buy a car is more than likely going to be Monday or Tuesday.
But not for the reasons you might think…
Going to the dealership earlier in the week is a better choice because it isn’t going to be as busy as the weekend and you can get more undivided attention. On the surface, you may actually think that is a bad thing, especially if you are hesitant about the negotiation process,
But if you think about it:
Do you stand a better chance of playing hardball with a sales staff that has a showroom full of other potential customers, or a showroom so empty no one has even eaten the free donuts yet?
How Much Can You Save Buying A Car Early In The Week?
Oddly enough, with all the hype, you really don’t end up saving a ton of money car shopping by simply switching up the exact day you go. Truecar actually estimated the savings (Average) at about $130. So again, not necessarily a magic potion for car savings in and of itself, but if you can add it on to some other tips and tricks, you will certainly be on your way.
3. The Best Time Of The Month To Buy A Car
Here is where it gets interesting: Is it really better to shop for a car at the end of the month? You’re going to love this answer: Yes and No! But, I will tell you something most “Experts” leave out:
Shopping at the end of the month DOES usually give you a better shot at the dealers who might be close to hitting a bonus, HOWEVER, it also means the likelihood that your dream car will no longer be in stock is also higher because you gave the general public a month to buy it out from underneath you.
In addition, the dealers are not going to advertise that they need to sell a car for a bonus. Why should they if there is a chance they can get you at full price? This complicates your efforts because you simply won’t know if:
- The Dealership is close to a bonus
- Isn’t anywhere near a bonus
- Has already hit their bonus
This benefit, like everything in life, comes with a trade-off, and if you are comfortable not getting everything you want in a car, waiting weeks and maybe even months to find a desperate dealer, this strategy is for you!
Tip: Dealers usually pack away a certain amount of Deals or Dealer Cash for the end of the month specifically to close last minute deals that might lock in those big bonuses. This money is very very hard to get, but if you mention it, that may help the dealership understand you know your stuff. This may also very well not work at all, but I think it’s worth a shot if time isn’t on yuor side.
4. Best Time Of the Year To Go Car Shopping
When is the best time of year to buy a car?
I’m going to start out (Start Out) being predictable here and telling you that if you go car shopping toward the end of the year you will have a better chance of getting a great price on a car. The reasons are obvious and go hand in hand with much of what we have already discussed:
- Car Dealers have sales quotas
- Car Dealers have bonuses
- Car Dealers need to clear out inventory
Catching a dealership right before the end of the year trying to hit a sales goal that could pay out hundreds of thousands or millions of dollars is without saying going to be very beneficial to you- The Consumer.
However:
Not only is that not the only time a great price can be had, it could also end up being the absolute worst time (For You) to buy a car!
Worst Time To Buy A Car
As we mentioned earlier:
- If you wait long enough that a dealership has already hit their quotas, you’re out of luck
- If you wait long enough that the car you want is sold out, you are REALLY out of luck
Waiting until the end of the month is a gamble, but if you fail, you can typically reset and try again in another few weeks. If you shoot for the end of the year and cant find a desperate car dealer, or the car you actually want in stock, there may be no coming back, and you could end up having to pay for a more expensive new model year.
Redesign:
If you are buying a car that has had an entirely new design from one year to the other, the waiting strategy becomes especially dangerous for obvious reasons.
The "Secret" Best Time Of The Year To Buy A Car
The best time of year to buy a car that no one really talks about is around May-June. Two Reasons for this:
- Tax Return Car Buying is slowing down, which means sales are going to start slowing down
- Next years models are going to start trickling in and “Some” car dealers are looking to make room as the first to have these new vehicles in stock
Again, this is going to be really selective as not every dealer will fall into this category, so you will have to be on the hunt to identify these dealers.
Try searching for 2020 cars in April to May, or even June of 2019, for example. This should reveal the dealers that are getting those new model cars in and from there you can probably assume that dealer could be looking to clear some space. Possibly even pair this time with Memorial day sales, although car shopping when the dealerships are busy isn’t usually the best way to get the best deal on your car.
Best Times For Used and Pre-Owned Car Shopping
What Is the Best Time of Year To Buy A Used Car?
Economic activity lately is making the predictability of “Used Car Buying Seasons” a bit more difficult than in years past. Sure, you have your memorial day car sales, and other big holliday savings opportunities, but are those even real savings anymore, or just great advertising with cars the dealers don’t even have in stock? A Bit of both I’m afraid.
Tax Return Season?
To keep things interesting- Our conversation for the best time of the year to buy a used car is going to “start” around Tax return season, or when people usually start getting tax return money- Usually late February to Early May. Some experts might disagree on this because popular opinion would be that when there are a lot of buyers, it’s a bad time to bargain.
However,
From my time selling cars I noticed that Car Dealerships and Lenders got very aggressive around these times because they are sort of “Expecting” to make a certain amount of money and they know that if they sleep, the competition will be right there to take your money instead.
Do Prices Go Up During Tax Season? Yes, but also, no. If you doubt me (And you are free to do that), think about the Christmas retail shopping season: Everyone is out buying gifts, but do stores raise prices?
Used Car Buying Strategy (Tax Season)
-This, like the Holiday Shopping Season between October and December, is a time to utilize the existence of competition. Make sure you find some other options (Other Cars) and let the dealers know. Important: Don’t just tell the dealership you are looking elsewhere, we don’t buy that line anymore. Print out a car listing or two, get specific! This will add credibility to your “Threats” and you will see a noticeable change in receptiveness towards a discount.
Best Time Of the Year To Buy A Used Car From a Private Seller
If you are looking to buy your used car from a private seller, the Holiday season could be a great time. People are busy and in need of the extra money, they are also in a better and more giving mood (Most of the time). This of course is going to require you be a cash buyer, so it’s not available to everyone, but it’s certainly worth the mention and most big car websites don’t really discuss it.
The Ultimate Time To Buy A Used Car
Getting back to being predictable: Yes, the holiday season, which in my opinion is from November to the first day or two in January (New Years Sales) does offer the best opportunity to get a great deal on a used car. But, as we mentioned above multiple times, waiting until the end of the year is risky.
-If the car dealer hits their quota, they aren’t looking to bargain. If the vehicle you want isn’t in stock, what difference does a better price make?
Best Time To Buy A Used Car In Florida
Pardon me for being a bit of a Homer here as I answer my fellow Florida residents most popular question, but this can be helpful to the national audience as well because Florida Used cars are some of the most desirable on the market- NO RUST!
When it comes to buying used cars in Florida it’s a year round proposition. Yes, there are degrees of when it might be better or worse, but it’s not usually going to be a bad time to buy a car in Florida because of the massive amount of competition in the state. I would say about 30% of my sales were to car buyers out of state, and as far away as California!
My opinion for the best time to buy a car in Florida is going to be the obvious one: November to December, with February being a potential hidden gem depending on the dealer. In 2018 a few dealers I know had a very bad February and it’s usually a ramping up period between Christmas and Tax season. If it’s usually a dead month on the books, the slow dealers will be eager to keep their numbers from dropping to low.
New Cars- Best Times To Shop
Oddly enough, the best times to buy a New Car are pretty similar to when it is ideal to purchase a Used Car.
- End of the Month
- End of the Quarter
- End of the Year
- When the new models are starting to arrive
You wouldn’t really think this because with New Cars the prices are pretty firm outside of Rebates and Incentives, meaning- Dealers don’t typically have much room to negotiate unless of course it’s in their best interest to do so to get their own Bonuses and Incentives.
The one advantage you do have with New Car Shopping is that you can visit multiple Car Dealerships and shop the exact same car. This helps you directly compare what one dealership is offering you over another, thus giving you the opportunity to say those famous words:
“If you can beat that price, I’ll buy from you”.
New Car Buying Tip:
New Cars are no long strictly delivered in the Fall of each year like they traditionally have been, they can start as early as the beginning of Summer. What this means for you is that the chances of your car being gone if you wait until the End of The Year To Buy A Car are higher as of 2019.
Conclusion
Each and every car deal will stand on its own, and for every person that got a deal on a car because they went on the last day of the month, there are probably more that went shopping at that same time that didn’t get anything special at all.
Generally, to get a great (Truly Great) deal on a car you will have to have a combination of these factors:
- Timing when a dealership needs to sell a car to hit a bonus
- The ability to be flexible on what you will drive
- Liking a vehicle that isn’t in high demand
Heads Up Car Buyers
Something we here at Autohitch are noticing (As of late 2018 leading into 2019) is that dealers have sort of leveraged themselves against a possible Tariff or Trade War with China. The theory is that if there are massive tariffs instituted that car prices will skyrocket and more people will need to buy used cars, used cars that will now be worth significantly more than the dealer paid for them.
To prepare, car dealers started buying up more of the available used cars on the market in 2018, this in turn caused prices to go up a bit (Supply and Demand). If Trump and China are able to work things out and there ends up being no trade war, you very well could see a VERY strong car buyers market as dealers now have more used cars in stock than they need at prices that never inflated.
Just a Hunch!