It’s a purchase many look forward to with excitement and anticipation: a new car. But while the thrill of a new set of wheels is incredible, most people would still like to get a good deal.
There are multiple theories out there about the best day or season to buy a car. Some say you should wait until the end of the year to buy the newest models. Others advise you buy at the end of the month. Other experts get even more specific, saying you should only buy on or around specific holidays, such as Memorial Day, Labor Day, or Fourth of July. The day of the week is even something you might have been told to consider. Is any of this true?
We’ll walk you through the best times to walk onto the lot. Before we do, remember that you should ultimately make your decision based on your transportation needs and your financial situation. There are several questions you can ask yourself in advance of a car purchase that will guide you through both the timing and the financing of such a large purchase.
Best Time of Year
Once you’ve decided on a make and model, as well as your budget (which we’ll help you with below), you can maximize the buying power of your allotted car buying dollars. So when’s the best time to buy a car?
According to Edmunds, the most discounted months for car purchases are at the end of the calendar year: October, November, and December.
Of these monthly options, December is by far the best month. You probably remember seeing car commercials around Christmas touting this or that automaker’s end-of-year sale. Maybe you were skeptical as to the truth of these discounts, but rest assured, those lower car prices are legitimate.
In fact, many car dealerships offer these year-end savings events with deep discounts on MSRPs (manufacturer’s suggested retail price) that can save you hundreds — if not thousands — on your car purchase. This is because dealerships and the automakers that supply them want to end the year with strong sales, as well as get the previous year’s models off the lot to make room for the new models coming through.
Other Holidays to Consider
While the last few months of the year are generally when you will see a lower price than average, you might need to buy a car at a different time of year. If that’s the case, all is not lost. There are other opportunities throughout the year to snag a deal on a new car purchase.
Federal holidays and three-day weekends are notorious for offering some of the best car sales available. Among the best options are:
- Presidents’ Day
- Memorial Day
- Fourth of July
- Labor Day
- Thanksgiving (Black Friday)
If you’re unable to wait until the end of the calendar year, these holidays are also good options. Many dealerships will offer extra incentives to draw shoppers in with such holiday sales pricing, lower APR, and even some rebates or cash-back bonuses for those who decided to come in.
These holidays often serve as a means for auto dealers to sell excess inventory, and a way to boost sales during months when sales volume is otherwise relatively low.
Best Time of Month
Another tip is to time your car purchase to fall in the last week of the month. This is because many salespeople have a sales quota to meet every month. If they meet that quota, it could mean a big bonus for them. That could translate to considerable savings for you, as they’ll be highly motivated to make a sale and may do so at a much lower price than they would have earlier in the month.
In order to take advantage of this potential discount, do all of your research in the first couple weeks of the month. That way, you’ll know for sure if you’re getting a good deal on the car you’ve picked out.
Best Day of the Week
It may surprise some, but just as there are recommended days for buying plane tickets and getting your grocery shopping done, there is also a best day of the week for a new car purchase.
That day is Monday.
Weekends are generally a terrible time to buy because the dealership is overwhelmed with foot traffic. As with any market, when demand is high, prices tend to go up. This holds true for car purchasing as well. If a sales manager has multiple potential clients bidding on the same model at once, they may feel less inclined to make a deal.
However, on Mondays the crowds thin out and immediate demand falls abruptly. This is borne out by the numbers. According to TrueCar, if you wait until Monday to buy a car, on average you will save 0.61% on the car’s sticker price.
Before You Buy
While it’s important to save as much as possible when your purchase your new (or new to you!) automobile, there are several other factors to consider before you decide to take the plunge into car ownership (on a Monday…at the end of the month…in December).
Do You Need a New Car?
Before you get too serious about purchasing a new car, consider your living situation. If you live in a city with good public transportation, you can likely thrive without your own private vehicle.
Alternatively, if you have easy access to ridesharing services, such as Lyft and Uber, or even car rental services such as Zipcar or Car2Go, you might be better off paying for those services on an as-needed basis.
And finally, if you already own a car outright, it may be worth your while to get a few more miles of use out of it. In fact, by some estimates, for every five years you drive your car after it’s paid off, you save the monetary equivalent of a new car.
Have You Considered the Total Cost of Ownership?
If you do have easy access to car alternatives, but are still considering purchasing your own, it might be worth the time to take a step back and do a few calculations. Many think the cost of a car is just the monthly payment, but there are many other factors that go into calculating the total cost of car ownership.
Other expenses associated with having your own set of wheels are gas, maintenance, and car insurance. According to research by AAA, the average cost of owning and operating a vehicle in 2017 was about $706 a month, or $8,469 annually — assuming you drive about 15,000 miles per year.
This figure includes depreciation, which is an often-overlooked expense when purchasing a new car. On average, new vehicles lose around $15,000 in value in the first five years of ownership. This is an important factor to consider as there is also the opportunity cost of putting a significant chunk of change into a car purchase. If you had instead put your cash in the market, you would likely experience a much greater rate of return on your investment.
How Much Car Can You Afford?
If you’ve decided that buying a new car is the best option for your lifestyle and worth the total cost of car ownership, it’s time to research the best car or truck for you.
The first thing you should think about is your budget. How much do you have available for a down payment on your new car purchase? Autotrader suggests a minimum down payment of at least 10% — although 20% is recommended — on a car purchase to capture the lowest interest rates and best financing options available on your auto loan.
If you need help figuring out how much you can afford, you can use this car affordability calculator. Based on the output, it can help you narrow down your purchase options and do your research on what cars and trucks you can comfortably afford before you go to the dealership for a test drive.
Timing Is Everything
Buying a car is perhaps one of the biggest expenses — after a new home — that you will incur in your lifetime. Making sure you get the best deal possible just makes good financial sense. Waiting until the end of the year, the end of the month, or even a Monday afternoon to finalize your car purchase can save you hundreds, if not thousands of dollars.
By understanding the best time to buy a car to maximize your purchasing power, you are setting yourself up for further financial success.