You may be in the market to purchase a new or used vehicle in the New Year. I sure hope that you did your homework leading up to your purchase. Figured out how much you can afford. Collected some insurance quotes. Researched various financing options. Narrowed your car search down to two or three models. If you did all the above, I’d say you are ready to buy a car. However, if you’ve ignored any of the above steps – I wish you then nothing more than luck in your car shopping adventure.
I can certainly tell you that the dealers, car manufacturers and financing companies did their homework. Just open up any newspaper or website and you will notice the deluge of new car advertising, per-owned car advertising and various financing offers.
Auto manufacturers and car dealers have been aggressively promoting “year-end clearance sales,” “reduced financing rates,” “special offers,” “clunker programs” and various other incentives. They want you to start the new year in a fresh set of wheels.
Every other retailer is doing their part to promote heavily leading up to Boxing Day. In the car industry, December is the slowest month. So, it’s no wonder that the auto advertising is up. And there is a lot of truth in this. If you read any personal finance book (and I’ve read my share of books last year), the author always suggest that the best months to buy a car are in November, December and January.
I’ve yet to buy a car in either of those months, my luck has served me to always need and buy a car in months leading up to the “hot” months.
Getting back to deals in the auto industry during the holiday season. What began as a one day event for Boxing Day, where consumers can purchase a new car for a ridiculous price, has now turned into a months long event. In today’s times, you can get a great car deal in December and January.
The thinking behind is the same – attract as many people by offering rock bottom prices and attractive interest rates in order to reduce our current inventory and bring in new inventory for the New Year. How clever! A win-win situation for both the dealers and consumers.
Consumers used to shop heavily during December in order to reap the great rewards from the retailers. However, times have changed. Consumers are getting more wiser and January has also become a hot month for retail therapy. Consumers are well aware that if the retailer did not meet their target during the holiday season, they will offer deep discounts in January to part with the overstock.
So, with keeping the above in mind I’ve prepared a few reasons to purchase a car in January (after the holidays).
December marks the end of the calendar year for dealers, when bonus money (for salespeople and mangers) is up for taking. Dealers are inclined to offer even more astronomical deals so that they hit their monthly and yearly sales quotas. However, January is a whole new ball game. New Year is upon. Some dealers made their quota and others didn’t, so they promote heavily by offering deep incentives to consumers (and their sales staff to sell) to start the year off right and make up for lost sales in the previous year. Essentially January becomes a buyers market.
Manufacturers want to bring in the new models and they can’t do it if the lots are full of previous year car models. So, what do about it? Offer attractive financing rates to consumers in hopes of attracting more consumers to purchase the stock on the lot.
Low Demand Models
If you’ve ever paid close attention to car ads, you will notice that at times only certain models have special offers, discount pricing or special finance rates. These models are the “low demand” models. Dealers are often motivated to sell overstocked vehicles that are in less demand. Certain models that have been sitting on dealer lots for months. The longer these ‘low demand’ vehicles gather dust, the more it costs dealers to their floor-plan.
Just one catch for the shoppers though - they can’t be too fussy about model, options or color etc…
Above reasons shouldn’t be your sole criteria for deciding whether to buy during the holidays. Refer back to the beginning of this article and remember other factors such as affordability, insurance and car financing options.
So, if you are prepared to buy now, the deals on vehicles are dime a dozen and they are selling like hot cakes. Enjoy your shopping and don’t be afraid to walk away if you’re not comfortable.