The best time to buy a car may be New Year's Eve, when you can save an average of 8 percent - but you have to go prepared.
In this economy, a lot of people are putting off big purchases like cars because their budgets are just too tight. But as we mentioned in another article today, some people can’t put it off any longer.
If you’re one of those people, here’s some good news: The best time to buy a car may be now.
According to TrueCar.com, some of the best days to buy a car are in December, and the best day in December for 2010 is the 31st, with average discounts of 8.2 percent, and some December discounts (2010 Chevrolet Silverado 1500 Reg Cab) as high as 24%.
The video above explains why now may be the best time to buy a car, but let’s recap. The reasons are small, simple things, but they stack up in your favor:
- Sellers are trying to make quotas – which earn them bonuses – so they’re willing to haggle. This happens at the end of every month, and the end of every year.
- Cars are a hard sell on most holidays, when people are thinking about partying and have already blown their budget. As with many investments, being in the thoughtful minority is to your advantage.
- The calendar’s about to flip into 2011. This instantly makes 2010 models sound “old,” especially since 2011 models have slowly been filling up the lots since July. In a department store, older merchandise might not be obvious and can sit on the rack awhile – but big stickers on the windshield are hard to miss.
All this means that if you’ve got the money to spend, now’s a good time to use it and save over the long run. But don’t get so excited by the discount that you lose your cool. These tips can lead to even better deals on wheels:
- Buy used. New car values plummet faster than your tires spin as you drive off the lot. According to Kelley Blue Book estimates, a new car loses 20 percent of its value in the first year and 65 percent in five years, on average. KBB keeps an annual list of cars with the best resale values, which can help – but the best bet to protect your investment is to just buy a used car. Read more about the long-term costs of buying new in our story Don’t Buy New Cars.
- Do your research. Find out what’s a good value for the long haul by researching on Kelley Blue Book or Edmunds. Some cars lose value faster than others: Check out this list of cars expected to lose 80 percent of their value over five years, and some alternatives. Other cars might seem worth the money, but have poor reliability ratings and will need frequent repairs. And don’t think that higher MPG necessarily makes a smaller car worth a higher price: Insurance can cost more on these. Check some quotes, compare ratings, look at the financing and incentives in your area, and do all the math.
- Minimize your “must-haves.” The more specific your demands are, the more you’re going to end up paying. If you’re flexible on the model, or at least the color, year, and extras, you’ll have more options and probably find better deals. Meanwhile, luxury cars often don’t come with the luxury of reasonable repair costs. And don’t buy accessories straight from the dealer: The after-market route is cheaper for stereos, wheels, and most everything else.
- Don’t lease. This may be a tempting option when it sounds like you can drive a better car for the same money you have on hand, but put the brakes on that thought: It’s probably going to cost more in the long run. Unless it’s a special, factory-subsidized deal, you’ll be paying interest. Your insurance costs could also be higher. If you really want a current-year vehicle at a lower monthly rate, consider picking up a lease from someone who can’t afford theirs on a site like LeaseTrader. If you’re stuck in a lease you don’t want, check out our story Three Steps to Break a Lease Without Getting Rear-Ended.
- Try private sellers. If you’re buying used, private sellers might be easier to deal with than dealers. At the dealer, negotiators are pros, and unless you’re one too, you might not get as good of a deal. Private sellers can rarely afford to sit on a car for months, and they won’t hit you with all kinds of fees. They’re sometimes easier to trust, too – although you should still get a vehicle report from a service like CarMax and have a professional look at it before you buy.
- If you’re patient, network. If you need more time to research or save up, or you’re just waiting for a better deal, spend that time wisely. Befriend your mechanic – that’s how Stacy found a Mercedes in excellent condition for $5,000 – see 8 Tips for Buying a $5,000 Car. Mechanics often know of people with reliable cars that want out.
If you need financing for a car, check out our auto loan search tool. And TrueCar is a good place to start looking at how much you’ll need. Play your cards right and you might end up with a car you can drive for a few years without problems — and then sell for a profit when you’re ready to upgrade again.