When to Buy a New Car
Admit it: You’ve got the itch for a brand new car. You want that new car smell so badly that you can almost taste it.
Before you head off to the dealer and ditch your old car, hold your horses. A little patience and planning can go a long way.
There are many factors that go into getting a great deal on a car, such as your credit score, how much money you save up, and the value of your trade-in. But there’s one more factor you don’t want to overlook, and that’s timing.
As it turns out, some times are much better than others for getting a deal on a new car. Let’s take a closer look.
Best times to buy a new car
The end of the month
If you have the time to wait, a simple tactic is waiting until the end of the month when salespeople are trying to meet their monthly quotas. During this time, you usually have a little bit more room for negotiation.
For example, you could start looking early in the month and reach out to a sales team associate around the middle of the month to get a pricing estimate. Then, hold off until the end of the month before playing hardball and negotiating the deal.
The end of the year
Time of year is also important when buying new cars. As with monthly quotas, dealerships and salespeople have annual sales goals to meet, too.
Towards the end of the calendar year (October through December), car dealers tend to be more aggressive about moving cars out of their showrooms to make room for inventory in the new year. It’s also the last chance for them to make some extra sales because January through April is typically the slowest season for car sales.
Again, have a variety of options lined up so that you can push negotiations to the last possible hour, even up until New Year’s Eve, when you may even get lucky with the best deal of the year.
Car dealers love hosting sales around holidays, especially during three-day weekends.
Some of the best holiday auto sales events include Labor Day, Memorial Day, Veterans Day, Presidents Day, and the Fourth of July. Many car dealers are also participating in Black Friday sales to drive year-end sales.
Monday is widely considered to be the best day of the week to buy a car. This is because sales teams typically sell a lot of cars on the weekend, and there are fewer shoppers on Mondays.
If a sales associate has a great weekend selling cars, they may be in a position to move a vehicle for less money just to pad their numbers. And if the associate has a lousy weekend, they may be apt to sell a car to change their luck or hit their numbers. Either way, Mondays are a good day to approach the deal.
Worst times to buy a car
The start of the model year
Dealers are unlikely to offer the best prices on new cars at the start of new model years. That’s because they typically like to hold new cars for a few weeks to gauge interest and see how they move before offering discounts.
Car buyers are better off waiting for at least a few months after a car comes out to shop around. At the same time, when a new model year becomes available, you may be able to get a special rebate on an older model.
The start of the month
It’s also typically a bad idea to spring for a car at the beginning of the month when sales teams are under less pressure to strike deals and meet their quotas.
Whenever possible, start looking at the beginning of the month, but wait until the last few days before the calendar changes to get aggressive about negotiating.
Saturday is usually the busiest day for car shopping because consumers have the most time to drive around and shop. Dealers are well aware of this, so they typically don’t offer the best car deals on that day.
If your time is limited, and Saturday is the best day for you to go car shopping, consider just checking out the vehicle you want and going for a test drive. You can then return on Monday to close the deal.
Car buying tips to consider
Make sure you really need a car
Shark Tank star and legendary investor Kevin “Mr. Wonderful” O’Leary is a big advocate of avoiding new cars. According to O’Leary, cars cost a fortune, and depreciation is a major issue because they never increase in value.
Furthermore, many of you might be working from home right now and have easy access to public transportation or rideshare services. You can also rent a car when you need one, or invest in a bicycle.
Think hard before buying a car, and determine if you really need one or if you just want one to make life more convenient. The better approach may be to put your money into tax-friendly retirement accounts or brokerage accounts so you can grow your money and retire earlier.
Do your homework
Before going over to the car dealer, do some online research using popular resources like Kelley Blue Book, Consumer Reports, and Autotrader.
Each of these sites can give you a clear understanding of your trade-in’s fair market value (if you have one). You can also learn the “blue book” value of the new car you have in mind.
You should also check out online marketplaces like Cars.com and CarMax so that you can see several pricing examples of similar makes and models. Then when you visit the dealer, you’ll have some reference points in mind.
Understand your budget
If you decide to get a car, don’t go car shopping until you figure out your budget.
By charging into the process because you’re excited about the latest TV commercial you saw about your dream vehicle, you’re liable to regret your decision down the line. You might even wind up with hefty car payments that you can barely afford, which is a personal finance disaster.
Also, keep in mind that most cars’ final selling prices are almost always higher than what you see on TV. Factor in the costs of gas, maintenance, and car insurance, and you might find that your all-in monthly payment is as much as some people pay for rent or a mortgage.
Stick to your budget and avoid falling too far into debt. If you really need a car, look into starting a side hustle to supplement your income so that you can pay off your car quickly.
Ditch the bells and whistles
Consider going with a standard model to save money. Your car won’t be increasing value, so there is no point in adding fancy features. Financially speaking, you’re much better off if you can save and invest the extra few thousand. You’re probably going to need that extra cash for repairs at some point, too.
Frequently Asked Questions
Is there a best day to buy a new car?
Yes. Monday is typically the best day of the week to buy a new car. Of course, this depends on a variety of factors, and each dealer is different. But Monday is usually considered a great day to secure a deal on a new vehicle.
What are model year transitions?
Model year transitions occur when car dealers receive the newest shipments of cars from manufacturers. They are typically a terrible time to buy the latest model of a new car. However, you could potentially get a good deal on an outgoing model.
Most of the time, it’s perfectly fine to buy the previous year’s model, unless there are must-have safety features or enhancements that you don’t want to sacrifice.
Should I buy a new or used car?
This is a matter of personal preference, your budget, and how much you need to drive.
Personally speaking, even though I have done well financially, I still avoid buying new cars. It’s just not worth it to me. But I also don’t need to drive nearly as much as others do.
Do you need a good credit score for an auto loan?
The short answer is yes. Having a good credit score makes a difference in terms of the interest rates you pay on your auto loan. And if you have terrible credit, you may not qualify for a loan.
Before applying for financing, review your credit score to see where you stand. (This is a good strategy to do regularly — you should always know your credit score).
If you try purchasing or leasing a car with a bad credit score, you’ll most likely be looking at much higher payments because lenders tend to view borrowers with lower credit scores as higher risk.
If your credit is in bad shape and you still need a new car don’t worry. You still have options.
Try to save up as much of a down payment as you can so that you can minimize your loan amount. This way, you’ll pay lower monthly payments and less on interest fees. Or, you could look into buying a used car and paying for it in cash, which is what I recommend for people with both good and bad credit.
- Credit Repair: How To Fix Your Credit
- 3 Credit Bureaus: How The Major Credit Reporting Agencies Work
- What is a Credit Utilization Ratio?
The Bottom Line
If you want to get the upper hand when making a new car purchase, you have to be savvy. Think of it like a game, where you, the dealership, and the salesperson are all competing to get the best possible price — and only one of you can win.
Remember that as friendly as your salesperson might be, they are most likely a very skilled negotiator. While they might act like your friend, their main goal is to sell cars and earn as much as possible, and who can blame them! Everyone has to earn a paycheck at the end of the day.
When the time comes for you to buy a new car, get your budget in order, follow the above tips, and you will be in good shape.
Plan ahead so that you can capitalize on the best timing as it applies to your situation. And don’t forget that cars do not appreciate in value like your investment portfolio should be doing.
Here’s to finding the best deal on the car that meets your needs and budget.