The Best Time to Buy a New Car: Strategies and Timing
When it comes to purchasing a new car, understanding the car buying season and dealership strategies can significantly impact your decision. Traditionally, the end of the current model year has been a great time for car buyers, but with the current market conditions, this conventional wisdom no longer applies. In this article, we will explore the nuances of car buying, why the end of the summer is still a good time, and the unique opportunities available in June and even on New Year's Eve.
Understanding Car Buying Seasons
Once new models are introduced in August or September, older model year cars usually start to see price discounts. Additionally, dealerships often acquire loaner or demonstration vehicles from the manufacturer, which can be sold at a discounted price. This occurs as dealers prepare for the influx of new models and to clear out the previous year's inventory.
The Current Market Condition
However, the current market condition is unprecedented. Some new cars are being sold at thousands over MSRP, and traditional supply and demand patterns don’t apply. Dealerships are operating with significantly lower inventory levels, often 40 to 70% below normal. With fewer cars to negotiate over, the bargaining power of the customer is reduced, making it challenging to secure discounts.
Why June is the Absolute Best Time to Buy a Car
Traditionally, dealerships introduce the next year's models in September, and the previous year's models start to appear at discounted prices. The end of summer is usually a good time to buy a car because dealerships are eager to clear out the old inventory to make space for new models. However, for 2022, June stands out as a particularly opportune time to purchase a new car due to a specific strategy dealerships and car salespeople use.
Dealer and Salesperson Incentives
Dealerships and salespeople rely heavily on quotas and goals to achieve their targets. Monthly, quarterly, and particularly annual goals are set, making each sale crucial for their commission and bonuses. The last week of June (often June 29th to July 5th) is the optimal time to buy a car because it aligns with the timeframe for hitting quarterly and annual targets.
Even Better - New Year's Eve
A recent study by TrueCar suggests that car buyers can save up to 8.3% on the price of a new car if they visit the dealership on New Year's Eve. This is the last day of the year for dealers to achieve both quarterly and annual sales goals. Consequently, dealers have a significant financial incentive to make sales as quickly as possible.
As an example, if you were considering a mid-range used car priced at $20,000, visiting the dealership on New Year's Eve could save you approximately $1,660 just because of the timing. This can be compounded with other negotiating strategies, potentially saving even more.
Conclusion
The best time to buy a new car, in my opinion, is when you need one. The traditional wisdom of the end of the summer no longer applies due to the current market conditions. However, the end of June and New Year's Eve offer unique opportunities to take advantage of special deals and save a significant amount of money. Understanding the dealership strategies and timing can give you a competitive edge in your car buying journey.