New Year, Used Car: The Best Time to Buy a Pre-Owned Vehicle

It’s no secret that the best time to shop for a new car is between Black Friday and New Year’s Day. But what about a used car? A brand new car may not be what you are looking for – whether you need a second car for your family, a car for a new driver, a work truck, or something that you can use as a commuter vehicle – sometimes pre-owned cars are the way to go.

It may seem like a stretch to spend a large amount of money right after the holidays, but January is the best month to buy used vehicles. And here’s why:

Strong December Sales

Many new car dealerships run great specials on vehicles in December to make room for new-year inventory. This means they have a lot of used vehicles on their lot that they want to sell.  In order to make room for new cars, these dealerships will likely have the used cars on excellent sales and provide low prices with attractive financing.

Given that over 1/2 of new car sales involve a trade-in and resale takes an average of 45 days, dealerships will be eager to get used vehicles off their lot, meaning the buyer has the upper hand in negotiating deals and better prices.

Slow Retail Month

After the holidays and going on spending sprees, many people tighten their wallets in the new year. People use what extra money they do have (after paying off credit card bills and debts) towards less frivolous things.

However, car dealerships still have to make money and meet sales quotas. This means one things: A buyer’s market. Dealerships and salespeople are eager to close deals and make sales, making January a great time to negotiate a better deal. This will even extend into February and even March, until people have paid off their debts and reenter the retail world.

Leased Vehicles Ready for Resale

Many people lease cars at the end & beginning of the year, which means many 3-year-old vehicles are available for resale in January. These vehicles are generally in great condition and will be “restored” to like-new condition. Since the mileage is lower than many used cars, you can find a steal – a newer model with low mileage for an exceptional price.

Luxury Deals

If you are shopping for a sports car or luxury model, chances are, you’ll land the best deal during the winter months. There is little supply-and-demand for sporty little cars with convertible tops or flashy little cars no suitable for harsh winter roads, which means you will likely get your pick of the best luxury vehicles for a much lower price than if you wait for the weather to get warmer.

Typically the more expensive cars on the lot, come January, these sporty little models suddenly drop in price and become more reasonably priced and the best deals out there.

Another Year Older

When the clock strikes midnight on New Year’s Eve, used vehicles suddenly become one year older meaning their value drops, and sometimes that drop is significant. For instance, Edmunds says the typical 2009 model sold for $19,392 in December 2012, but $18,738 in January 2013 – a 3.4% price drop in just one month.

This is true for models that are only 1 or 2 years old as well – you can find an “old” model that is just 2 years old, and in most cases, it will be in mint condition with just some miles put on.  For this upcoming January, look into 2017 models instead of a 2018 model and you’ll be shocked at how low the price is compared to it’s 2019 counterpart.

Shop Around for Financing Deals

Oftentimes, the finance deal the dealership will offer you isn’t the best you can find – especially in the new year.  A lot of banks, credit unions, and regional banks will offer financing incentives in the new year for existing customers. Contact your bank to see what deals they are offering and if you qualify for low interest rates. There may be discounts available if you enroll in auto-pay or use an existing bank account for the monthly payments.

Before settling on a pre-owned vehicle, be sure to look up what the MSRP was for the vehicle originally, and if there is any resale information. This can help you negotiate prices and deals in the long run. The most important thing to keep in mind is to have a set price that you cannot go over. No matter how great a deal, if the deal is more than you are able to spend, it’s not worth it.  Never overspend just because a dealership is pressuring you to sign a deal to help them meet their quota.  Keep shopping around – you will find the best deal for you!

 

Why December is the Best Time to Buy A Car

There are arguably a few different times throughout the year that are ideal for buying a car. But December is the best time to buy a car.

It’s enough that dealerships are generally emptier during the holidays due to people traveling, but sales teams have looming quotas to meet before the year’s end. To put it simply, they want cars out the door. And the best way to do this is to run unbeatable deals.

In fact, consumers can expect to get almost 8% off MSRP values when buying a car in December as opposed to waiting until January.

Like any big purchase, it’s important to do your research before you buy a car, so do your research (and maybe even test drive a few) during the fall. This will give you plenty of time to decide what make, model, and trim options you want in your dream vehicle. But when it comes to making a purchase? Pull the trigger between Black Friday and New Year’s Eve.

Here are just a few reasons why December is the best time to purchase a car:

Better Leverage (& Negotiating)

Dealerships tend to be slower during the winter months, so in order for the sales team to meet their quotas, they will be desperate to get cars out the door and on the road. This means you, the buyer, will have better leverage to get a great deal on the vehicle you desire. Take advantage of an empty dealership to ask lots of questions and get in-depth about the car’s features, amenities, safety ratings, and when it comes down to price, don’t be afraid to haggle.

Making Space for Newer Models

October, November, and December see a lot of new makes and models come onto the scene in preparation for the new year. But this means the old inventory has to find a new home so there’s room on the lot. Meaning… prices will drop. If you are shopping for a car, instead of buying a 2019 model, look at 2018 models instead. The prices will be significantly lower because they aren’t the newest model on the market anymore. But December is when the prices hit the lowest – the longer a car sits on the lot unsold, the lower the price drops.

Peace of Mind

You may not think about this when you are purchasing a vehicle right away, but have a safe and reliable vehicle can bring you a lot of comfort during the winter months when road conditions are treacherous. Having a vehicle with new tires, top-notch breaking capabilities, and updated technology can give you more confidence when you are driving on slick and snowy roads.

Holiday Bonuses

Everyone loves a little extra cash for a holiday bonus. Why not out it to use and put it towards a down payment on a vehicle.  If you can put down a higher percentage, you will be able to get a better interest rate, or better yet, if you can pay with cash, there’s a huge chance you can talk down the price even further!

If you’ve been dreaming of a new car, now is the time.  This is the best time to buy a car, so put your haggling skills to use and be prepared to get the best prices on the market!

Why August is the Best Time for Car Buying

Traditionally, when you ask someone when they the best time to buy a car is, they’ll tell you December. It’s common that automakers will offer end-of-year deals and incentives to boost sales for the final quarter.  But what is less known is that there are also incentives to purchasing a vehicle in August.

Historically, August has shown to have the lowest transaction price of the year (a 2.4% decrease versus the average).  The end of summer is when dealers are trying to clear out their aging inventory to make room for new inventory. With such a large volume of vehicles passing through car lots and showrooms, dealers can offer a great flexibility in price in August.  

Back-to-School Car Buying

For growing families, back-to-school time means carpool, soccer practice, and hauling kids around to after-school activities.  As kids get older and bigger, it only makes sense to invest into a larger vehicle that will fit a growing family.

Other families may decide that back-to-school time is a good time of year to buy a safe, reliable car for the new driver in their family or to a child who just got their learner’s permit.  Families may also decide that their new graduate needs a vehicle before heading off to college, so cars with good fuel efficiency, bluetooth capabilities, and navigation are in high demand.  

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Regardless of the situation, August is a peak time for families who are looking to buy cars. Automakers and dealerships can be motivated by the year end change to move their existing inventory.  

Model Year End Car Buying

With the new year inventory starting in October, many dealerships clear out their older models to make room for their new year models.  So in order to make room, they want to offer great deals to customers. Buying a car in August will allow you to take advantage of the specials that dealerships are running while there is still a good amount of current-year models available.  

SUV Deals

Families and buyers interested in SUVs are in luck if they purchase in August. On average, SUV prices are lower than any other month of the year.  Customers who have been holding out for better pricing will see the best options and availability for savings during this time.

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August offers historically high buyer incentives, great discounts, and larger prices drops than other months. Also keep in mind that purchasing a vehicle in the beginning of the month can result in a 1.3% decrease in price or an average of $390 in savings, compared to the rest of the month.  If you find a dealership that is open on Sundays – go then! The largest decrease in average transaction price occurs on Sundays – averaging 4.6% or $1,402 in savings.

Happy Car Buying!

7 Best (and Safest) Used Vehicles to Buy

As soon as your drive off the lot, your new car loses significant value.  That’s why there has been a rise in used car sales over the last 8 years. Some of the most reliable vehicles on the road get a second life as being sold as used and certified pre-owned cars.  

Used vehicles that are at least 5 years old are typically the best bargain, with most of the vehicles on this list being resold for less than 50% of their original price.  

Best Used Vehicles to Buy

1. 2010 Acura RDXImage result for 2010 acura rdx

This 5-passenger RDX was the U.S. News and World Report top-ranked luxury compact SUV in 2010.  

With a perfect reliability rating from J.D. Power & Associates, the RDX comes equipped with leather seats, bluetooth, and satellite radio.

The 2010 model earned a 9.4 score for safety and resells for an average of $17,726.

2. 2009 BMW X3

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The BMW X3 was the top-ranked compact SUV in 2009 and earned 5/5 reliability ranking from J.D. Power & Associates.  

The sporty exterior is paired with a luxury interior with a panoramic sunroof, but some features like Bluetooth, were considered add-ons at the time.  The powerful engine still holds up 8 years later against newer models.

The resale value of the X3 averages $15,847 and was scored a perfect 10 safety rating.

3. 2012 Cadillac CTS

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Nearing the top of the 2012 Upscale Midsize Cars, this powerful 3.6L V6 received a 4.5 out of 5 reliability rating from J.D. Power & Associates.  

The CTS comes standard with features like leather interior and Bluetooth.

Selling at half its original price at $21,798, the 2012 CTS was scored a near-perfect 9.7 for safety.

4. 2009 Ford Fusion

Image result for 2009 Ford Fusion

This sedan was the No. 1 Affordable Midsize Car in 2009.

With a perfect reliability score from J.D. Power & Associates, the 2009 Fusions comes standard with traction control, optional stability control, and 5-speed automatic transmission.

Reselling for only a fraction of the original price at an average of $8,777, it was given a 9.6 safety score in the evaluation of used cars.

5. 2010 Lexus ES

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Topping the charts of upscale midsize cars in 2009, it was given a perfect 5 out of 5 ranking from J.D. Power & Associates.

This luxurious sedan comes standard with leather seats, power sunroof, and an 8-speaker stereo.

Selling for just a fraction of the original price, you can purchase a 2010 ES for just $12,060 (compared to the original price in the mid-$30,000s). The 2010 model scored a 9.4 safety rating.  

6. 2011 Mercedes-Benz E-Class

Image result for 2011 Mercedes E Class

This 5-passenger, luxurious sedan earned a perfect reliability score from J.D. Power & Associates.

This Mercedes-Benz luxury sedan comes standard with leather upholstery, heated front seats, and navigation system.  

The E-Class average resale price runs around $26,302, which is about half of the original price.  This sedan was awarded a perfect safety score.

7. 2011 Toyota Avalon

Image result for 2011 Toyota Avalon

In 2011, the Toyota Avalon was the top-ranked of the most affordable large cars. Like most Toyotas, J.D. Power & Associates awarded the Avalon with a perfect reliability score.

The 5-passenger sedan features a sleek exterior, updated dashboard, bluetooth and USB connectivity, as well as a power sunroof and leather seats.  

The 2011 model scored a 9.7 safety rating and resells for an average of $17,447.

How to Speed Up the Car-Buying Process:

You did it! You found the car of your dreams. you took it for a test drive. you know it’s the car you want to drive home. And now… you wait.

The used car-buying process can be agonizingly slow and drawn out since more times than not, it includes arranging financing, signing contracts, and determining what other aftermarket add-ons you may want for your vehicle. With newer technology becoming standard in vehicles, some of that lengthy wait can be chalked up to going over the navigation, audio, and entertainment systems.

However, the longest delays can happen when you show up with the wrong, expired, or forgotten documents. By following this checklist, you can avoid some delays and get on your way.

speed up car-buying process

Car-Buying Process: Document Checklist

  • Payments: You can use a bank check or credit union check for the pre-approved loan amount, or if you are financing through the dealership, you can use a personal check or even a credit card for your down payment. To know what checks are accepted at the dealership, call ahead of time and speak to the finance manager.  They will be able to tell you everything you need before stepping foot into the dealership.
  • Driver’s License: The dealership will need to know that you are legally allowed to drive the vehicle off the lot once it’s purchased, so be sure you bring a valid driver’s license. This will also service as a form of identification for your check or method of payment.
  • Title for Your Trade-In: If you are trading in a vehicle, you will need proof that you own the vehicle. This shows that you are the owners and are allowed to trade it in. If you had a co-signer on the trade-in, be sure to obtain their signature ahead of time. Tip: Be careful during this stage. If the title is signed incorrectly, it could be rejected by the dealership or motor vehicle registry. If you are unclear as to what needs to be signed, speak to someone at the dealership and they will be able to assist you.
  • Current Vehicle Registration: If you are trading in a vehicle, you will need the current registration. Be sure it is valid, up to date, ad the stickers on your vehicle match the documentation.
  • Proof of Insurance: In order to drive your new car off the lot, the dealership will need to see proof of insurance. Call your insurance company and inform them of your pending purchase so your policy can be updated quickly, as soon as you know what vehicle you are purchasing. In some cases, insurance companies will fax information directly to the dealerships, however, some dealerships just need visual proof that you have a current auto insurance policy.

car-buying process documents

  • Pay-Off Amount for Trade-In: If you are trading in a car that you still owe on, you will need to bring the payoff amount and loan information. If you are unsure how to handle this, call the lender and explain what you are doing. This type of transaction occurs regularly, so they’ll be able to walk you through the process.

Buying a used car doesn’t have to take all day. Come prepared and you will hit the road in no time!