Now, because its towards the end of the year?
Thanks in advance for clearing this up for me.
Peace
AVA.
The end of the model year is August or thereabouts, and you can get some decent deals as the dealer want’s to clear out the inventory before the next year’s models arrive in September (although never as good a deal as the dealer’s Year-End Clearance advertising would have you believe).
You have to balance the savings on the model year against the decline in value of your new car as it suddenly becomes last year’s model a week after you bought it. Of course, you take a huge hit on depreciation as soon as you drive it off the lot, but still…this is why I like to buy lease turnbacks (two years old, 25K miles or so). Let someone else take that hit.
The last day of the month is also often a good time because salesmen and dealerships are scrambling to meet sales goals.
I always had good luck at the end of September.
- End of month
- End of quarter
- Making room for new model year
Of course, by waiting until the very end of the model year, you might not be able to get exactly the car you want.
For example, if your heart is set on a white 2003 Toyota Celica GTS with a moon roof, rear spoiler, sport wheels, and turbo ninja plutonium fog lamps, there may be none available anymore.
2004 model year cars are already being sold, I’d say you’re a bit late.
December 31st on a cold rainy night can’t be beat. Month quotas, quarterly quotas, yearly quotas, and the salesman knows that no other customers are coming in through that door.
muttrox is on the right track. Actually, I’ve seen some statistics that say that anytime from mid-December until the end of December is good - people are too busy with Christmas shopping to fiddle around with cars.
Before you buy anything, however, you owe it to yourself to read these tips on buying a car. These days, if you have a computer, you can get several dealers bidding against each other for your business - you don’t ever need to subject yourself to the high-pressure world of the showroom. That website has a lot of material, but it’s well worth the time to read through it.
The end of December is best in those states with inventory taxes on cars. The dealers would rather lose some money to you than to the state.
The “end of the month” may not be the same for the dealer as for you. For a couple places I haggled with recently, it was a couple days after the standard end of month when they “closed the books”.
As a general rule of thumb, the best time to buy a car is when:
- Dealers have more cars than usual.
- Dealers have fewer buyers than usual.
If you have a lot of time to shop, like months, drive by the dealerships in question. When the lots look full, pull in.
Always, always, know ahead of time the value of the car. When you can quote the amount the dealer really paid for the car (forget “invoice”), most salesmen concede the game and things go quickly from there.
To amplify on what ftg said, the invoice price is what the dealer paid for the car, but not what it actually ends up costing him. When he sells the car, the factory gives back 2 or 3% of the base MSRP (the sticker price, not including the destination fee) to the dealer. This is called the “holdback” - think of it like a factory-to-dealer rebate.
To find these numbers, go to http://www.edmunds.com, and research the car you want to buy. The invoice price will be readily available. The holdback is buried a bit deeper. When you’re looking at the numbers for the car of your dreams, scroll down until you see a place where it will let you click to compare similar vehicles. One of the choices is “compare prices.” If you choose that one, it will give you a chart that lists the holdback percentage. There are some makes that don’t have a holdback, but most domestic makers give back 3%.
So, the MSRP of a car may be $20,000, plus a $350 destination fee - the bottom price on the sticker is, therefore, $20,350. The invoice price might be $18,500 (again, plus the dest fee). When the dealer sells the car, the factory gives him $600 back (3% of $20k). So, the dealer’s actual cost is $17,900, plus the dest fee, for a total of $18,250. So, you might start out offering $18,787 (3% profit on the cost of $17,900, plus the $350 destination fee).
Ignore anything on the sticker like “processing fee,” “dealer prep,” or “ADM” (which stands for “additional dealer markup”!), and make it clear that your offer includes any and all fees, other than tax, registration, and title (being state fees, these are non-negotiable). Don’t let them get away with adding any of those bogus fees on top of whatever price you’ve agreed upon.
If they start playing games with you, walk out.
In Indiana, there’s an inventory tax, effective March 1. At a formal dinner, I asked Mrs. Nott’s boss (at the time) if prices were really any lower at "tax time. Mrs. Nott was working for a major car dealer. The boss paused, and then he said. “No. Not really.”
Why not just buy from the factory? Assuming you have a factory nearby. I think we have a Toyota factory in Fremont, Calif.
OP said a new car but didn’t specify what year.
You save some on insurance if you buy late in the model year, because you have a newer car with an older model year.
If you buy a new 2004 car in 2003, the “book value” and your insurance rate will be higher for a longer period.
If you buy a new 2003 car near the end of 2003, next year’s insurance could be lower.