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Best Time to Buy a New Car

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Best Time to Buy a New Car

Written by Corrina Murdoch
Fact-checked by Caitlin Wood

Best Time to Buy a New Car

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Auto Financing Car Loan New Car

Keeping your eye on the market is always a good idea, especially when it comes to getting a new car. Perhaps your current vehicle is a bit worse for the wear and paying for the repairs costs more than it’s worth. Maybe there is a new vehicle that’s really piqued your interest? From growing families to travel plans, there are plenty of good reasons to decide to get a new car

However, simply wanting and needing a new car isn’t a sufficient reason to go out and get one right away; you have to find the best time to make your purchase. Unless you can pay cash upfront for the vehicle, you are going to need a car loan — and that means it’s important to find the best deal. From competitive interest rates to sales on the sticker price of vehicles, there is an art and a science to finding the right time. If you can identify the right time — of the week, the month, and the year, you can get some truly great savings. 

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Timing is Important When Purchasing a New Car

The key to finding the right time is a waiting game. To everything, there is a time, and identifying the best time to approach a salesperson, you can see massive savings. From there, it is a matter of holding out for the right opportunity. If you plan ahead and inform yourself on the different ways you can save, you can use the natural sales cycle to your advantage. From retailer quotas to floor space, there is no shortage of opportunities to leverage yourself into a better car deal. The first step is to plan out your timing. Consider approaching car salesmen at the end of the following: 

Toward The End of The Day

It’s surprising the difference a few mere hours can make. While it might seem risky to get to the showroom right before the business closes for the day, there are many benefits to this approach. Especially if sales were slow on that day, the reps may be willing to give you a lower price in order to complete the many for that business day. Keep in mind that the only way for this to work is if you know what car you want and don’t have many questions to ask. You need to go in with knowledge and confidence to make this plan work. The main goal is efficiency, so having too many questions will slow down the process and defeat the purpose of making that same-day purchase. 

Here are some great questions you can ask your dealer when buying a new car

Toward The End of The Month

Less surprisingly, when you go to a dealership toward the end of the month, you can get some really competitive prices. Both in terms of commission and requirements for the job, salespeople rely on meeting their quotas. If you know that the sales have been slow at that particular location, whether due to market competition or a downturn in the economy, you can use that to your advantage. 

A good way to assess if this is a viable plan is competitor research. If a dealership in the same community was offering a promotion during that month, it can lower the sales for other businesses. Use this to your advantage and approach dealerships whose sales may be suffering during that month. You know that they need your sale, so leverage that need into a better rate. Be sure to know what price you’re aiming for and set your expectations realistically.  It can result in a serious discount from the sticker price. 

Check out what dealerships do with unsold cars

Toward The End of The Year

In the past, a leading opportunity for car buyers to get a good deal is at the end of the year. Annual quotas can put pressure on salespeople and result in them giving in to your demands, leading to you getting a much more desirable price. The best time is during the last couple of weeks during December. This is because the dealership may be trying to get rid of that year’s models in order to free up space for new vehicles. It is also because the fiscal year is coming to an end. The company needs to wrap up its books for that year and wants to make as many sales as possible.  

Additionally, as a market standard, you can access a variety of year-end sales. These discounts, while predictable, can offer savings and result in major discounts on new cars. Though these sales often last until the end of the year, they may want to start early. If your approach is to find an existing sale instead of planning to leverage quotas against the dealership, it’s important to keep an eye out for earlier sales. This is a good approach for those newer to purchasing vehicles; who may not be as confident when approaching a dealership. 

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Be sure to stay up-to-date on the sales since some come as early as Black Friday. Many dealerships let you subscribe to marketing emails, which can serve as a good opportunity to stay apprised of discounts. It helps when planning ahead to have all the information you need. This way, when a good deal comes around, you can jump on the opportunity. 

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When New Models Are Launched

New car models launch annually; and, as a result, dealerships need to free up space on the floor for these newer, more profitable vehicles. The life cycle of a vehicle refers to the design cycle, meaning the same make of vehicle will be launching with new perks. As a result, you can get a better price on the existing vehicle. Newer options get added to inventory between August and September. During these times, you can access better rates since the dealership needs space for their new inventory. 

Find out when you should buy a new or used car

On Certain Holidays

It’s no secret that holidays lend themselves to discounts. In order to incentivize buyers, dealerships make prices very desirable. Since a lot of holidays, including boxing day, occur during slower sales periods, you can usually leverage yourself a better price. When a holiday occurs at the end of a quarter; and, ideally, the end of the month, it creates a perfect climate for savings. When the need to make a quota meets the regular savings offered by an annual sale for the holidays, you might be surprised by how much you can actually save.  Keep an eye on discounts during long weekends like Labour Day and Thanksgiving. Often, there are very competitive discounts available during these times. 

Check out how you can save money on your car insurance.

During Promotions

In addition to the savings seen from holidays and end-of-year sales, individual dealerships will offer incentives to buyers to keep themselves competitive on the market. These range from reduced prices, cash-back incentives, and deals when trading in your old model. In a lot of cases, the sale will involve a lower rate of interest (something that can save you a lot of money in the long run). Stay up-to-date with the offerings from your local dealerships to optimize your savings. While it might be easier to look at only a couple of dealerships, in order to get a full view of the market, it is better to keep tabs on multiple dealerships. 

The Off-Season 

It’s no secret that, in Canada, we have a few months of winter. As a result, vehicle sales are subject to an off-season. While you are not likely to be driving a convertible with the top down in the middle of January, you can get a much more competitive price on the vehicle when you purchase it during the off-season (winter and late autumn). To move product, dealerships drop the price of convertibles during the cold season. 

Thinking of buying a hybrid? Here’s a list of some of the best hybrid cars in Canada.

The opposite is true for SUVs and other family vehicles. Sales for this type of automobile are most common during the winter months. Knowing this, you can approach the dealership during the summer. Since SUVs are less likely to sell during warm-weather periods (when buyers are on vacation), you can get a much more competitive rate. 

Final Thoughts

Getting a good price for your new vehicle is all about understanding the nuances of the market. Though the car-sales industry may seem straightforward, there are a lot of ways you can use seasonal, annual, and even monthly cycles to your advantage. When you plan ahead and do thorough research beforehand, you put yourself in a much better position when speaking to car salespeople. 

The first step is to understand what vehicle you plan to purchase. Do your research on the life cycle of that model and determine which dealerships in your area sell that vehicle. From there, do some historical research on that dealership. When do they have sales? Have they seen a slow year or a downturn in sales this month? Use this information to equip yourself with the facts you’ll need to leverage yourself a good price. By conducting thorough research, taking your time, and remaining confident in your abilities, you can get a truly competitive price on a  new car. 

Car Loan Glossary

Terms
Add-Ons

Any features or services that are applied on top of the base price of a car are considered add-ons. These can include things such as tinted windows, heated seats, leather seats, alarms, and wheel locks, to name a few.

Base Price

The base price of a car is the cost of the vehicle without any upgrades or added features that can be added after the car is ordered from a dealership. Only standard equipment and the manufacturer’s warranty are included in the base price, but any other fees will be added afterward.

Certified Pre-Owned (CPO)

CPO cars refer to used cars that have been certified, either by the dealership selling the car or the manufacturer of the vehicle. This gives consumers confidence knowing they are buying a used vehicle that is in good condition. When a used car is obtained by a dealership, it is inspected by a certified mechanic. The car is then repaired if it meets the required standards and is then ready to be sold as a CPO vehicle.

Clear Title

A clear title means that the owner of the car has a free and clear title and no longer carries a balance owing on a car loan. There are no liens of the title or levies from creditors.

Dealership

Auto dealerships are businesses that are authorized to sell new or used automobiles to consumers and serve as a direct dealer for automakers

Dealership Financing

Consumers can obtain dealer financing to help fund the purchase of a vehicle. A contract is signed with a dealership that requires a consumer to pay for a specific amount plus interest and funding fees over a certain period of time. Dealers will send the details of the consumer’s financials to various lenders to find one that will approve the loan.

Depreciation

Depreciation refers to the decline in the value of a vehicle. Immediately after purchase, a vehicle will become less valuable as soon as it is used. Put another way, depreciation is the rate at which an automobile loses its value over time

Extended Warranty

Vehicles come with a manufacturer’s warranty when purchased, but buyers can choose to purchase an extended warranty. This serves as a form of insurance policy on the vehicle to cover the cost of potential repairs in the future. An extended warranty is usually good for a certain period of time and/or mileage.

Lease

A contract that allows an individual the right to use or occupy a property for a specified period of time in exchange for a monthly payment. Leases are common for a property like apartments and vehicles. The individual on the lease does not own the asset at the end of the lease’s term, it is strictly for rental purposes.

MSRP (Manufacturer’s Suggested Retail Price)

Car manufacturers will offer recommendations on how much a car should be priced at the retail level, known as the manufacturer’s suggested retail price, or MSRP. The purpose of the MSRP is to standardize pricing in the automobile industry so that there is not a lot of fluctuation in price from one dealership to another.

Title Loan

A title loan uses the vehicle title as a form of collateral to secure a loan. Borrowers must own their vehicles free and clear and no longer owe any amount on a car loan. A lender will place a lien on the car title in exchange for funds. If the borrower defaults on the loan, the lender can take possession of the vehicle and sell it to cover any losses.

Trade-in Allowance

A trade-in allowance is the amount that a car dealer will reduce the cost of a new car purchase by after the consumer’s old vehicle has been traded in. It is somewhat like being given credit from the sale of an existing vehicle that is then applied to the purchase of a new vehicle.

Trade-in Value

A trade-in value is the amount that dealerships offer consumers for their vehicle and is typically applied toward the purchase price of another vehicle. Dealerships will assess the value of the vehicle and will base the amount that can be applied to a new car purchase. The consumer will then trade in the old vehicle and the assessed value amount will be deducted from the price of another vehicle. Trade-in value is often different than what the vehicle may be worth when sold in the open market.

Vehicle Identification Number (VIN)

Every vehicle will have its own unique vehicle identification number, which is used to identify a specific vehicle. No two vehicles will have the same VIN, making them easily identifiable with this unique 17-character code.


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