Are you expecting to purchase a car this year? That’s actually good news. While people typically don’t like car shopping — it means spending an absurd amount of money, after all — there are ways to get a good deal and go easy on your wallet. Summer is actually the best time of year to buy a car, no matter what you’re shopping for.
Deals abound this time of year, whether you’re looking for a brand new car, a new car from the previous model year, or even a used car. While we have a tendency to hem and haw when making such significant purchases, if you find yourself in the position of needing a new car you probably don’t want to wait much longer.
Deals on Last Year’s Models
It seems the model year for cars creeps earlier all the time. Growing up, I remember seeing model-year-end deals starting in September. Now they start as early as July. That’s great news for those seeking new cars, because it means great deals. Manufacturers want to clear out the previous model year so they can focus on the new one. The end result is a favorable situation for car shopping consumers.
There are two major types of deals you’ll see on new cars from the previous model year:
Rebates. When I was a kid they called them factory-to-dealer incentives, but that term seems to have transitioned to merely rebates. The manufacturer, wanting to clear out previous year models, offers dealers rebates when they sell these older models. That is to say, dealers can sell them for a lower price than they paid for the car, because the manufacturer is reimbursing them.
For consumers, this means a chance to negotiate. The dealer will always supply you with a copy of the invoice — the invoice price is technically what the dealer paid to put the car on the lot. If there are rebates going on, you can negotiate below the invoice price, sometimes significantly. Make sure to start out with a price well below invoice, and be prepared to walk away. If the dealer senses you might actually leave, you could walk away with a great deal.
Zero percent APR. Some dealers offer zero percent APR on purchases of previous model year cars. This essentially means that you pay the price agreed upon, with only tax and registration adding to the bill. In other words, you get a cash deal that you can spread over five years. It’s hard to beat that.
The big warning with zero percent APR deals is reading the fine print. If you
New: State of the Art and Value
Why buy a brand-spanking-new car when you can get last year’s model for a far cheaper price? for starters, it is considerably more valuable right from the start. No matter when you buy a 2013 model car, it is still considered a 2013 model. If you bought it at the end of the 2013 model year, you will realize the same resale value as someone who bought the same car at the beginning of the model year (mileage may change the valuation slightly, but only slightly). This is a huge incentive for those who frequently trade in cars for newer models.
Consider this as well: the manufacturer has to make improvements with each year’s model, or else no one will buy it. So while you might find value in the previous model year, you’ll find undeniably better features in the new model. This can include trivial features, such as the radio and sound system, but it can also include essential elements such as fuel economy and horsepower. Safety features will also be up to the very latest standards, a significant consideration for many car buyers.
Used: Unloading Before Winter
If you’re going to buy a car in the summer, and you have enough money to buy a quality model, you’re probably better off going with a new one. There are plenty of good deals on used cars, and many dealers certify them and offer warranties, but you just never know how the previous owner treated it. Many serious problems can be painted over, so you won’t notice until you’ve owned the car for some time.
Still, there are summer values to be found in used cars, especially if you live in Northern regions that have harsh winters. A car owner might seek to upgrade a regular four-door sedan at the end of a model year, upgrading to an SUV to better navigate the snowy weather to come. Dealers do offer trade-ins, but you can almost always get more money by selling directly.
In other words, late summer is the time to be on the look out for cars parked in driveways and yards with for sale signs on them. You can certainly negotiate down the price, and if you pay cash you can get it down considerably. At the same time, you can usually get a decent car. Again, used isn’t the most reliable way to buy a car, but if you’re low on funds and want a deal, end of summer is a great time to pounce.