Is the End of the Year Really a Good Time to Buy a Car?

Every business you can think of is having a Black Friday sale, including car dealerships. Sure, maybe you weren’t thinking of putting a vehicle on your holiday shopping list, but the end of the year is often rumored to be a good time to buy a car. If you’ve been thinking of getting a new set of wheels, you might be tempted to check out those seasonal promotions.

Used car sales are up and new car sales are down, according to Jessica Menton at USA Today, which makes dealers extra amped to unload some of their lingering inventory. On top of that, the federal funds rate cuts this year have led car loan interest rates to drop.

But does that mean you should rush out to make this very large purchase at one of the most hectic, spending-heavy times of year?

I asked David Bennett, manager of repair systems for AAA, who said the end of the year is, in fact, a good time to buy a car. “Dealers may offer reduced savings to move vehicles from inventory, which saves them in taxes based on year-end inventory,” he said.

That old myth you might have heard about getting the best deal on a car when the new model year comes out? That’s not really true. It’s all about the calendar year if you’re trying to save. But that doesn’t mean every sticker price you see is worth rushing to buy. Here’s what to remember if you’re thinking about purchasing a car.

“Consumers should begin researching vehicles now so they are able to identify a “good deal” when available,” Bennett said. Start with the make and model you’re interested in and research the pricing options on the manufacturer’s website. That’ll give you an idea of what you can expect from dealerships. Those auto makers’ websites will also show you any manufacturer-level discounts or other promotional offers you can expect for the model you’re eyeing.

A lot of dealerships will offer you a gift card for $50 or $75 just for coming in and test driving a particular model. But that tactic is likely to get you sucked in. If you’re not ready to test drive a particular vehicle, put those “offers” out of your mind and focus on what discounts the auto maker offers, then the discounts the dealership has clearly listed online. Once you subtract those from the retail price of the car, you’ll have an idea for the pricing you can expect. That’ll help you spot a real deal on Black Friday.

Interest rates have dropped, but that doesn’t mean you’re guaranteed an amazingly low rate on a car loan. Your rate still largely depends on your credit, so adjust your expectations accordingly. Bennett advised aspiring car buyers who need financing to get preapproved for a car loan before shopping to best identify your upper limit on costs.

Then, once you’re at the dealership, “The loan rate can be used as a negotiation point when buying the car,” he said. Saving 1% on interest may not seem like a big deal when you’re signing the paperwork for financing, but it’ll save you a boatload of interest in the long run.

Even if you have your heart set on buying a car, Bennett said not to let your emotions get the best of you. You don’t have to negotiate with sales people and get pressured into paying more than you planned.

If the deal you’re being offered isn’t right for you, get out of there and continue to think through the purchase. “Remember that you’re in control of the purchase, Bennett said. “You can walk away from the negotiation at any point prior to purchase.”

Source: Lifehacker.com

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