Our friends at AutoTrader wrote this article a couple years ago, however, the information in the article is always relevant. If you’re in the market for a new car, but not sure when you should make the jump, take a read below for some helpful information.
Buying a new car at the right time can pay off. Buyers who catch the dealer at just the right time can save hundreds or even thousands of dollars on their new-car transactions. Conventional wisdom states that the best time to buy is at the end of the year, when dealers are discounting vehicles to meet their annual sales goals. It’s true: Buying at the end of the calendar year is smart. But there’s no guarantee that a year-end sale will yield the best deal on every new-car model. And not every buyer can afford to wait. Fortunately, smart shoppers can get good deals all year long using the same logic that drives year-end bargain prices.
That means understanding how dealers operate, then hitting them when they’re most anxious to close sales. Nearly all new-car sales representatives work on commission, be it a percentage of the sale price or a flat rate per vehicle. Each individual involved in a dealer’s sales process — from the salesperson to the finance manager — is given goals. That’s why the year-end strategy works for buyers. Even when sales are strong in the first 11 months of the year, dealers push in December to meet or exceed their goals.
Of course, sales professionals don’t wait until December to sell vehicles and meet goals. They work hard throughout the year to turn shoppers into buyers, and their short-term sales goals can be just as beneficial to buyers. Looking for this short-term push — which actually happens every day — can lead to an attractive deal for buyers.
Timing Is Everything
At the end of the day, for example, sales and finance professionals are ready to head home. But a smart salesperson will not let a serious potential customer walk away just because the dealership is ready to turn off the lights and lock the doors. New-car shoppers can often negotiate strong deals during late hours, provided the salesperson thinks he or she is dealing with a serious buyer. Staying late to close a deal doesn’t change the fact that everyone’s ready to go home, so the dealer may make concessions to speed up the negotiation. Of course, shoppers may be tired and ready to go home, too, causing the plan to backfire. Make sure you’re well-rested and ready to hang in there for the long haul if you decide to pursue this strategy.
This same technique can be used at the end of the month or quarter, too, since dealers usually operate on a monthly cycle and use that time interval to measure sales. Hitting the dealership at the end of the month may be less stressful for buyers than negotiating at the end of the day, too; the atmosphere at the negotiating table may be calmer when salespeople are not anxious to get home to their families or personal lives. If the dealer or a sales representative is just shy of monthly goals, buyers could have a negotiating advantage. In some cases, buyers can get great deals at the end of the month even when sales goals are met. The reason is that special bonuses for salespeople sometimes kick in only after he or she reaches the monthly goals.
Another smart time to buy a new car is late summer or early fall, when new-model-year vehicles are rolling into dealers’ inventories. This year, buyers may get an attractive deal on a 2013 model vehicle, provided the replacement 2014 models are already on the lot. In some cases, dealers will even have the previous model year in stock. AutoTrader.com still has listings for brand-new 2012 model vehicles. On the other hand, buyers who demand the newest models will likely pay closer to the manufacturer’s suggested retail price, or “sticker price.” In the case of some all-new or redesigned models in high demand, dealers may ask for more than the sticker price. Don’t expect to get both the latest model and the best deal. It’s likely you’ll have to make some concession if you want the best possible price.
Buying a new car at the end of the calendar year remains a good strategy because it follows the same logic as these other buying techniques; it’s based on when the dealer is most anxious to negotiate. But the window for buying is relatively small, and not all shoppers can afford to wait. So hit the dealership any time demand is low — even on a rainy or snowy day — and you’ll be more likely to save compared to the shopper who negotiates when the dealer is busy closing sales.