The Right Time to Buy a Car
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UPDATED: Aug 28, 2013
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Car loan borrowers and car shoppers often think the best time to buy a new car is when they need one. They can even be forgiven for thinking that the best time to get a new car is when they see a model that catches their eyes.
Experts explained to loans.org that there are actually times of the year in which getting a car can save car shoppers a great deal of money.
Timing is Everything
Max Katsarelas, Marketing Manager for Mojo Motors, told loans.org that his company found that the best time to buy a car is in the summer and early fall because this is when car dealers drop most of their prices in order to attract more customers and increase sales.
“It makes sense since most people in the summer are taking vacations, not buying cars,” said Katsarelas. “In the early fall, most people are getting their kids ready for school and spending money on school supplies, not buying cars.”
As a result, dealerships crave cash flow in the summer and often offer promotions. Still though, Katsarelas advises car buyers to take into account how long a vehicle has been on a lot or if a new body style is being released soon.
“Dealers typically want to sell a car before it’s on their lot over 40 days,” he said. “After that point they will drop the price substantially or consider offers they wouldn’t normally consider. On new cars, when an updated body style is released in the fall, the price of the old body style will drop meaning shoppers can find a great deal.”
Even though new model cars carry a large amount of power in society, Katsarelas doesn’t think that they are wise decisions for budget conscious car shoppers who are fine with the slightly older body style of last year’s model.
He also recommends that car shoppers keep their eyes open on holidays since most dealers also use that time to pump up their sales and promotions, such as during Thanksgiving. Sales also tend to happen in the beginning of the year and around tax season since many people use their tax returns to help pay for their car purchases, make down payments, or to pay a car loan’s first month.
Stan Markuze, President and Co-Founder of Part My Ride, disagrees with Katsarelas and believes car buyers should instead wait until Winter to get a new set of wheels.
“If you want a 2013 model, you should buy it between December of 2013 and February of 2014,” he said. “At that time, new 2013 cars are losing value because 2014s are coming in, and all things equal the 2014s will be more desirable to buyers. If you want a used car, I don’t think there’s necessarily an optimal time to buy. It’s more important to negotiate a good deal once you’ve found the right combination of color, mileage, and condition.”
Wheeling and Dealing Cars
Linda Guthrie used to sell cars when she was in between jobs. She believes that the best price for a car can always be found through the internet on dealers’ websites regardless of the time of year.
“Send an email inquiry using the site first,” she said. “They will call you repeatedly and you can work on the price more. You can’t get an Internet price if you first walk into the showroom to get a price. It’s forbidden.”
Guthrie explained that the overhead of all the showroom floor sales associates is higher than the overhead a dealership’s internet department, so the prices they give reflect that difference.
As one could imagine, the best prices for cars appear when dealerships need to move old inventory because of the arrival of new models. Since most new models are released in the Fall and September, that is the ideal time Guthrie thinks car shoppers should come into dealerships, but with the internet price in hand.
“If there are still several of last year’s models left, wait it out until there are only one or two left,” she said. “Then, go back and do your haggling by phone with the Internet Sales Dept. And, don’t ever buy on your first visit.”
Even though she recognizes that major holidays often have special car sales, she warns car buyers to remember that a dealer will never be willing to go as low as when they have to get the old models off the lot to make room for the new models. Dealers need to make room for their inventory and since they make only a slim profit on the sticker price of a car, they rely on dealership financing to make their money.
“Never, ever finance a new car with the dealership, but don’t tell them that until you get into the finance office because, by then, the deal is done,” said Guthrie.
Interestingly, she pointed out that many dealerships have sales every single month, yet not all are known to the public since some have corporate manufacturer incentives behind them while others do not.
“It is well worth going to the American corporate website of whatever model you are interested in buying to review those incentives yourself,” she said. “Well informed is well armed given what you’re up against in a dealership.”
No stranger to the underhanded reputation that car dealerships have, Guthrie was appalled at her former dealership’s business methods, attitudes, and morals, not to mention the temperament of her co-workers and managers.
After joining the dealership, she quickly earned the ire of the sales managers since she always told customers the real price of each car and informed them which nearby credit union offered the lowest car loan rates. However, even though she became the top seller in the internet department each month, she decided to leave the dealership once her friend, the President and Chairman, retired.
“I had come to believe that I was working with and for a bunch of grown-up bullies,” she said. “I began to pity anyone trying earnestly to get a fair deal on a new car. It was clearly time for me to move on. The car buying experience is intimidating for a reason: they don’t want you to know anything. They want to hold all the cards.”
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