The end of the calendar year can be a great time to get a deal on a new or used car. There’s more to it than just strolling into the dealership on New Year’s Eve though. Getting the lowest possible price takes planning, preparation and some inside information.
The key is understanding how car dealerships motivate their sales people, (and also how the manufacturers motivate the dealerships.) Armed with that knowledge you’ll be able to time your visits and purchase to make the most of the rebates, bonuses and incentives on offer.
That was one important tip, but there are another nine to remember and act on. So here are our top 10 end of the year car buying tips from AutoCheatSheet.com.
1) Understand the Dealership’s Motivation to Sell
Good salespeople are naturally competitive and they’re very motivated to hit their targets. That’s why car manufacturers give dealerships goals for monthly, quarterly and annual sales. Hitting those numbers means bonuses and rewards for the top performers. As a knowledgeable car buyer you can use this information to your advantage.
If selling you the car you want will get them within reach, or push them over those targets they’ll be very motivated to deal. That’s why the last few days of any month is a good time to buy, the end of a quarter is better, and best of all is the end of the year.
Use this handy Car Payment Estimator to calculate the payment on any vehicle.
Of course, if they’ve already hit their targets when you walk in they’ll be happy for you to come back next month. That’s one reason for not waiting until the very last day of the year.
2) Start the Car Shopping Process Early
Dealerships are traditionally slower the first few weeks before Christmas. They get busier than normal between Christmas and New Year’s because people are off work and have time to car shop. That leaves the salespeople with less time to spend on you and they may be too busy to arrange test drives. Instead of expecting them to roll out the red carpet when you show up on December 31st, do your research and narrow your search for the perfect vehicle ahead of time. That includes taking any test drives.
3) Be Flexible in what You’re Looking For
You’ll never get a great deal on a car that’s popular with consumers and selling well. Even if you think it’s too expensive there’s another buyer coming along soon who’s willing to pay the price. But if you’re not picky about having the latest, most fashionable ride there are some bargains to be had at the end of the year.
Scoring the absolute lowest price usually means taking the outgoing model year vehicle rather than the new model. (That means driving off in a 2019 model rather than the 2020’s that the dealership started receiving from the factory around August.)
If you plan on keeping the car several years and aren’t concerned having the newest styling or features this can be a good option. However, there is a bit of a depreciation “hit’ if you’ll change it after just two or three years. You’ll probably also have a limited number of color and trim options to pick from.
Even if you want the new model, being flexible can pay off. The dealership may have cars with trim packages or color schemes that just didn’t quite work. When the salesperson senses that you’re a “value” shopper he may suggest you look at these. If you want a great deal don’t be too quick to say no.
4) Do Your Car Shopping Online
These days there’s no need to trudge around dealerships hunting for that “perfect” car, and the end of the year is usually a rotten time to do that anyway. (It’s always a bad idea to look at cars under artificial lighting as that changes the way colors appear.)
Instead, learn about your options from the comfort of your home or office. When you’ve narrowed it down to one or a few vehicles start looking to see what’s available. Most dealerships even have their inventory online so you can see if they have the exact vehicle you want.
5) Get Quotes From a Few Local Dealerships
Dealerships love internet sales. It makes their life easier. Once you’ve figured out what car would suit you best, and you’ve checked dealer inventories, it’s time to request a few online quotes. I recommend using a trusted online company such as Ryde Shopper, Motor Trend, or Cars Direct. These companies will send you high volume Internet price quotes that will automatically include any discounts or cash-back incentives currently available in the marketplace.
Explain that you’re interested in a specific vehicle and ask for a quote. It’s usually a good idea to say what you’re driving now because some brands offer loyalty bonuses while others have “conquest” incentives.
In most cases what you get back will include all applicable rebates and bonuses, and it usually comes out less than what you’d be offered in the showroom.
6) Check Used Vehicle History
This tip is aimed specifically at used car buyers. While the five tips above apply to buying either a new or a used car, used cars are more likely to have been in accidents and have hidden problems like flood damage. That’s why you should have any used car you want to buy inspected by an independent certified mechanic and run a history report on any vehicle you have a strong interest in.
You can find several history services online. However, they are not all created equal. We strongly recommend using a company such as AutoCheck Vehicle History Reports for reviewing used car history you’re interested in purchasing. Their data is backed by Experian and is used by automotive industry experts daily to get the information they need to buy and sell the most trusted vehicles.
You can read more about these reports, how much they cost, and what’s included in them in my complete guide on used car vehicle history reports.
7) Use Competition Between Dealership’s Online
Get quotes from multiple dealerships. Some may have access to rebates and incentives that others can’t match. Alternatively, some may be willing to trim their commission, especially if it helps them hit those year end targets.
Don’t be afraid to play one off against another either. This is your money we’re talking about! If you’d like more information on strategies and techniques on how to use the Internet to your advantage. Read my article on how to use email to negotiate with dealers online. I even provide you with a few sample email templates for you to use.
8) Test Drive, Test Drive, Test Drive
Always, always drive the vehicle or vehicles you’re interested in before making your final choice. You would try on a pair of shoes or pants before you bought them, right?
Contrary to popular belief. You can’t return a car just because you decide you don’t like it, so a test drive helps avoid an expensive mistake. Be open to the idea of driving something else too if the sales person suggests it. It may be that they can offer a better deal on the alternative.
Call ahead and let them know you would like to come in and test drive a certain make and model of vehicle. Tell them you’ve narrowed down your search and you would like to drive the car to make a better decision on which one you’d like to own. You also need to let them know, you will not be buying a car and you will not take up a lot of their time. The salesman will appreciate your honesty.
Use this handy Car Payment Estimator to calculate the payment on any vehicle.
Keep in mind, the car salesman, if they’re any good, will still take a run at you. And may even have a manager come out and talk to you. Don’t get upset, they’re just doing their job. Let them know your reasons and stick to your guns, you have a plan and you’re sticking to it.
9) Shop Extended Auto Warranties Online
At some point in your car buying process. You will be given the option to purchase an extended auto warranty. Personally I believe this is not a bad purchase as long as you don’t pay too much for the coverage. Again, you should comparison shop beforehand.
Instead of paying too much at a dealer, I recommend contacting an online third party extended warranty company first such as Complete Car Warranty. This online company has been in business for a long time and can provide you with an extended warranty, legally named extended service contracts, with equal or better coverage at a lot cheaper price than what the dealer will charge you. Contact them for a free no-obligation quote.
You can use their quote as leverage to negotiate better prices with the dealer. Make sure you wait to bring them up until after the dealer has told you the ACTUAL cost of the coverage they are trying to sell you. You can read more about dealer extended auto warranties here.
10) Get Pre-approved for Financing, (and check on insurance)
Don’t try to arrange financing at the dealership. It takes time and if your credit is less than perfect you may get a nasty shock. Instead, talk to your bank or credit union ahead of time so you know how much you can borrow and what interest rate you’ll be charged. Having a pre-approved auto loan in place will level the playing field when meeting the finance manager. If they want to earn your finance business, they either need to match your current interest rate, or better yet, beat it.
If you don’t have time to check with your local lending institution. The Internet makes it easy to apply for an auto loan. Applying with online auto finance companies such as myAutoloan, LightStream and Auto Credit Express is quick, easy and best of all, free. MyAutoloan not only allows you to apply for a pre-approved loan online, they also provide you with up to four loan offers so you can compare and choose the best one for you.
That way, if the dealership is offering low interest financing you’ll know if it’s really a good deal. And don’t forget that a piece of paper stating you’re good for a loan of a certain amount shows the salesperson that you’re a serious buyer. Read my chapter for everything you ever wanted to know about how a dealership’s auto finance process works.
It’s also prudent to find out what insurance will cost on the new car. Especially if you have teen drivers in the house you may find it jumps up, (or less likely, comes down). The worst thing in the world is finding out after you bought a car, your monthly premium payment is more than your actual car payment.
You can visit well known insurance companies online to get free, no-obligation rate quotes. The companies we recommend are Libery Mutual and esurance. After receiving your quotes from these companies you can do a comparison to guarantee you’re receiving the best coverage for your money.
BONUS) Be Ready to Buy
Believe it or not, some people visit dealerships for fun. They just like looking at new cars and collecting brochures. The salespeople could do without these “lookers,” so don’t be one.
After doing your research and taking test drives you should know exactly what you want to buy and what you’re willing to pay. When you show up at the dealership make it very clear that you are willing to buy a car right there, if the price is right. That gets the salespeople’s attention and helps you get a great deal.
Save a Bundle By Car Shopping at Year’s End
There are some great deals to be had on new and used cars during the last few days of December. The prospect of hitting annual targets makes the sales people a little hungrier than at other times of year and they’re often willing to be flexible.
Getting the very best deal may take some flexibility on your part too. The very best prices will be on the outgoing model year vehicles although there may not be a lot of choice. Don’t think you have to settle for outdated styling and features though: dealerships are eager to move the new cars too. Just follow our 10 end of the year car buying tips and you could save a bundle. Maybe even enough to pay for all those gifts you bought earlier in the month!
Be a Smart End of the Year Car Shopper
The number one tip for saving the most money when shopping for a new or used car is to always, “DO YOUR CAR BUYING HOMEWORK FIRST!” For more hints and tips on navigating the new and used car buying process, spend a little time upfront before beginning your car shopping journey by browsing through my 100% free online car buying guide – AutoCheatSheet.com.
As always, I recommend using an online referral service such as Ryde Shopper, Motor Trend or Cars Direct before visiting a car dealership. Their free online price quotes will automatically include any discounts or cash-back incentives currently available in the marketplace.
Leading up to the last day of the year, learn how to use free online new car price quotes to get an even better price by having dealerships to compete with each other online.