When to buy a new car?

[Collar_N_Cuffs]

When is the best time to do so?
Looking for insights from people with experience in the industry please.
Buy a 2014 model before year end? January? Does the market get even more desperate to dump them in February? Is there anything left at that point? Etc, etc.
Thanks for any tips you can supply!

 

[SweetErika]

From what I've read and can tell, there are usually certain 'year end' periods for each make, model (e.g. depending on popularity), and the situation of the specific dealership plays a big role as well. Generally, between August and mid-October there's a sweet spot for price + selection, although there are a lot of deals to be had between August and late December. For many models, waiting until November/December is a risky proposition WRT selection.

Which car(s) are you looking to buy?

We've bought new cars (a personal use Civic in 2003, and a Ford Edge for my husband's company in 2010) in the first 10 days of October. The Civic was from a very high-volume dealership that wanted to clear out remaining models to make way for new inventory and could afford to sell below the invoice price in order to earn our business and referral business. The Edge was from a smaller dealership that was undergoing a remodel (particularly on the lot, but inside as well). I'm guessing they were pretty desperate to make any sale, especially as we were heading into fall/winter weather and my husband's company was paying cash for the car. So, while a higher volume dealership may offer a better selection and easily afford to take a hit on your deal, a lower volume/distressed dealership can also be a very good way to go if you find one that's highly eager to negotiate and get your business.

What I did do when shopping for both of those vehicles is price shop A LOT and deal with the Internet Managers first via email at dealerships. I looked around and researched, requested quotes from the Internet Managers at many dealerships in the area, then offered those managers an opportunity to beat the lowest quote. Both times, we went with the dealer/Internet Manager who said they'd beat the lowest quote of any competitor in the area. And they certainly did on the hope that we'd refer others because we got such a great deal, and the dealer would actually make a profit on that future business.

We were going to replace my Civic this year, but then I heard that most of the CUVs I've been considering were being redesigned with the features I value most for 2015. So, we'll shop and narrow it down until August, then keep a close eye on local inventory and price shop for the best deal on my next car (I'd prefer almost-new-used, actually, but sometimes it makes more financial sense to grab a 0% financing deal).

 

[Collar_N_Cuffs]

From what I've read and can tell, there are usually certain 'year end' periods for each make, model (e.g. depending on popularity), and the situation of the specific dealership plays a big role as well. Generally, between August and mid-October there's a sweet spot for price + selection, although there are a lot of deals to be had between August and late December. For many models, waiting until November/December is a risky proposition WRT selection.

Which car(s) are you looking to buy?

We've bought new cars (a personal use Civic in 2003, and a Ford Edge for my husband's company in 2010) in the first 10 days of October. The Civic was from a very high-volume dealership that wanted to clear out remaining models to make way for new inventory and could afford to sell below the invoice price in order to earn our business and referral business. The Edge was from a smaller dealership that was undergoing a remodel (particularly on the lot, but inside as well). I'm guessing they were pretty desperate to make any sale, especially as we were heading into fall/winter weather and my husband's company was paying cash for the car. So, while a higher volume dealership may offer a better selection and easily afford to take a hit on your deal, a lower volume/distressed dealership can also be a very good way to go if you find one that's highly eager to negotiate and get your business.

What I did do when shopping for both of those vehicles is price shop A LOT and deal with the Internet Managers first via email at dealerships. I looked around and researched, requested quotes from the Internet Managers at many dealerships in the area, then offered those managers an opportunity to beat the lowest quote. Both times, we went with the dealer/Internet Manager who said they'd beat the lowest quote of any competitor in the area. And they certainly did on the hope that we'd refer others because we got such a great deal, and the dealer would actually make a profit on that future business.

We were going to replace my Civic this year, but then I heard that most of the CUVs I've been considering were being redesigned with the features I value most for 2015. So, we'll shop and narrow it down until August, then keep a close eye on local inventory and price shop for the best deal on my next car (I'd prefer almost-new-used, actually, but sometimes it makes more financial sense to grab a 0% financing deal).

Ok! Excellent advice! As I am not suffering for a car,, but just considering one, this really helps a lot. Thanks so much!

 

[southern_gal]

Every car we've ever bought new has been at the end of a month. End of the year is likely even better but there are twelve months and only one year so the timing is harder once a year. It is absolutely true that car dealers have monthly quota's that they need to hit and they will really jump thru some hoops at the end of the month if they need a few more to make that number. Be patient and haggle (I am awful at that so hubs does it........I'm easy) and always always always walk out after they've made their "best last offer". If you come back the next day they know you are a serious customer and they will get serious too. Good luck and enjoy the car.

 

[JAMESBJOHNSON]

Whatever aint selling is what they discount and try and unload. But a great deal on a land yacht can eat you alive to feed it and fix it. Look at the dealers lot, if cars are every goddamned where and theyre renting space to store the overstock make an offer on something.

 

[southern_gal]

Also......don't buy the extended warranty from the dealer. It is pure profit for them and you have years before you need to invest in that. As long as the new car warranty is still in effect you can easily choose from several places that sell them and are cheaper than the dealer. They add that to the cost you are financing and make money for the first few years that you are not even using it. I've learned a lot by watching and listening.

 

[Collar_N_Cuffs]

More great points and advice. Thank you!

 

[southern_gal]

More great points and advice. Thank you!

Or try this......if that's you in your av, just wear that into the dealership. I imagine they'll pretty much give you whatever you want and then some.

 

[GiggLeGasm]

decide what you want.
go to edmunds.com or a similar site.
decide what you're willing to pay.

send a fax to a handful of dealers in your area. it should state what you want, what you're willing to pay, and when the offer closes. Depending on the vehicle, I've even let them know that 5 other dealers have been contacted and how far I am willing to drive to get the vehicle.

how will you be selling your old car.. or will that not be an issue?

 

[simplegirl]

Also......don't buy the extended warranty from the dealer. It is pure profit for them and you have years before you need to invest in that. As long as the new car warranty is still in effect you can easily choose from several places that sell them and are cheaper than the dealer. They add that to the cost you are financing and make money for the first few years that you are not even using it. I've learned a lot by watching and listening.

Where else can you get the extended warranty? I'm in Canada, so it may not apply, but here (as far as I know) you have to purchase the extended warranty at the purchase of the vehicle. Even from the same dealership, I can't purchase the extended warranty a couple years down the road, even if it's still under manufacturer's warranty at the time. So any alternative is great news to me!

They've taken a lot of the haggling out of car shopping here. The price on the ticket is the price you pay, although you do have a little wiggle room but not much.

 

[southern_gal]

Where else can you get the extended warranty? I'm in Canada, so it may not apply, but here (as far as I know) you have to purchase the extended warranty at the purchase of the vehicle. Even from the same dealership, I can't purchase the extended warranty a couple years down the road, even if it's still under manufacturer's warranty at the time. So any alternative is great news to me!

They've taken a lot of the haggling out of car shopping here. The price on the ticket is the price you pay, although you do have a little wiggle room but not much.

Lots of online places sell extended warranties. I doubt I can post it here cause it'll look like I'm advertising for them but there are a lot of companies that do it. BIG difference in price too. Ya gotta sort thru them and find the best one - kinda like men but they are out there and have a wide variety of prices and stuff that they cover.

One other thing, most seem to not be willing to sell bumper to bumper coverage after a car has reached a certain number of miles but if you are looking around while the original warranty is in effect you will have no problems. Hubs has a truck that has like 70,000 miles and he still got an extended wrnty for it.

 

[Harold_Hill]

When is the best time to do so?
Looking for insights from people with experience in the industry please.
Buy a 2014 model before year end? January? Does the market get even more desperate to dump them in February? Is there anything left at that point? Etc, etc.
Thanks for any tips you can supply!

Having sold cars myself at one time, there is no good or bad time of year to buy a car. The best way to buy a new car is to decide what kind of car you want to drive, (if you don't like the car, it cost too much regardless of what you paid for it), then do the research and find out what other people are paying for the same model. There are plenty of websites that discuss the real retail price of cars. The sticker price is what the Dealer wants for the car, not what he will take it for.

There are some things you can do/learn, that will help you make a better deal. If it is a popular car, such as a Mustang or Camaro, don't expect much of a discount; however, if the car isn't selling well, (even if it is a very good car), the Dealer is more likely to negotiate a better deal. The more difficult the car is to sell, the more likely the Dealer will discount the car.

Another way to make a good deal on a new car is to look for cars that have been on the lot too long. For example, if a Dealer has two identical cars, and one has been on the lot for less than a week, and the other has been on the lot for over six months, the Dealer will take less for the car that has been there for six months than he will for the car that has been there only a few days. Dealers rarely own their own cars, (the bank does), and the Dealer pays interest on them. The longer the car has been on a lot, the more interest he has to pay, and the more he wants to sell it. Most Dealers try to turn their stock over within 90 days. The longer it has been there, the more they want to get rid of it, no matter how good the car is.

If you live in a state where the Dealers are closed on Sunday, go to the lot while they are closed and look around at what they have. It helps to know what the Dealer has before you start talking to a salesman. Also if the Dealer doesn't have what you want, don't waste your time going to that car store.

By far, the best way to buy a new car is to educate yourself before you go to the Dealer. The more you know about the car, (and how to buy a new car), the more the salesman will work with you. Salesman love lay-downs. A lay-down is a buyer who knows little about the car they want to buy, and less about how to buy it, and lays-down and gives the salesman all the money. The more the buyer knows about the car, and how to buy it, the harder the salesman has to work.

Knowledge is your best tool when buying a car. No what you want to buy before you go to the Dealer. In most stores, after you make a deal with the salesman, and before you go to finance to sign the contract, you haven't actually bought the car. All you have done is make a deal. When you go to finance to sign the contract, the finance manager will try to sell you add ons, like extended warranties and protection packages. Do your research and decide what you want to buy before you go to the Dealer. Most customers are usually tired after road testing the car and negotiating the deal with the salesman, (buying a car can be stressful), and this finance manager takes advantage of this, and tries to sell you things you might not buy if you were more rested.

Know what you want, and don't be afraid to shop around. The salesman's Achilles heel is an educated buyer.

 

[subwannabe]

Also, get pre-approved for the loan amount by the bank of your choice. Don't let the dealer find you the "best rate" because they won't. They get a kickback on the loan and the higher the interest rate they can stick you for the more of a kickback they will get. Don't let them know that while negotiating the price though. Make them believe you will go through their financing department to get the best price on the car and then when you get there you can say you already have the check from your bank. Don't take any add ons. They are all a rip off. Say no to everything.

 

[SweetErika]

Also, get pre-approved for the loan amount by the bank of your choice. Don't let the dealer find you the "best rate" because they won't. They get a kickback on the loan and the higher the interest rate they can stick you for the more of a kickback they will get. Don't let them know that while negotiating the price though. Make them believe you will go through their financing department to get the best price on the car and then when you get there you can say you already have the check from your bank. Don't take any add ons. They are all a rip off. Say no to everything.

What if you have stellar credit and the 0% or 1% financing from the car company IS the best deal? We went through Honda for 1.9% financing (vs. 3 or 4% from a bank/credit union), then just paid as much as we could afford above the payment amount each month to minimize the amount of interest we paid on the loan.

Edit: If you don't have the credit you need to get a no- or super low- interest rate, then I agree.

 

[Harold_Hill]

Also, get pre-approved for the loan amount by the bank of your choice. Don't let the dealer find you the "best rate" because they won't. They get a kickback on the loan and the higher the interest rate they can stick you for the more of a kickback they will get. Don't let them know that while negotiating the price though. Make them believe you will go through their financing department to get the best price on the car and then when you get there you can say you already have the check from your bank. Don't take any add ons. They are all a rip off. Say no to everything.

Negotiating the price based on Dealer financing, and then trying to give them a check from your own lender at closing doesn't work. New cars are sold three ways. Cash price, financed price, (or payments), and difference between your trade in and the price of the new car. If you are buying a car that is going to have to be financed, the payback they get from the lender is part of their profit. Dealers aren't stupid, (they know all of the scams), and they are not going to let you cheat them out of any of their profit. If you negotiate a deal based on Dealer financing, they won't write the contract any other way. (No matter what kind of deal you negotiate with the sales department, you haven't bought the car until both the Dealer and yourself sign the contract) If you try to give them a check at closing, they will rework the deal, and not be very friendly about it. All it will do is piss them off, and in the end, probably cost you more money. No matter what you are buying, you're not going to get a good deal from someone you just pissed off.

 

[Harold_Hill]

What if you have stellar credit and the 0% or 1% financing from the car company IS the best deal? We went through Honda for 1.9% financing (vs. 3 or 4% from a bank/credit union), then just paid as much as we could afford above the payment amount each month to minimize the amount of interest we paid on the loan.

Edit: If you don't have the credit you need to get a no- or super low- interest rate, then I agree.

There is no such thing as 0% or 1.9% financing. When the Dealer tells you that you are getting a 0% or 1.9% interest rate, the rest of the interest is charged into the loan up front, and you pay it believing it is part of your principle payment. If you can get a 3 or 4% interest rate from your bank or credit union, you are better off because Dealer financing at best will be 9 or 10%. Technically, they aren't lying when they say you are getting a 1.9% interest rate, because if you were to read the loan statement, it will say 1.9%. They just don't tell you that the rest of the interest was charged into the principle of the loan.

Instead of trying to figure out what the actual interest rate is in Dealer financing, compare the total payment of Dealer financed loans to bank/credit union finance loans. Banks/credit unions will usually give you the real interest rate, and the difference in the two payments is the real amount of interest charged in Dealer financing. When a person's credit is good, (stellar as you put it), the difference between the payments will usually vary only a few dollars per month, and not worth wasting the time to figure out. It is only when a person has questionable credit, (or trying to buy a car from a dishonest Dealer), that the difference in the interest rates will make much difference to the monthly payment. This is usually the case with banks; however, (depending on how much money you have invested in the credit union), sometimes you can get exceptionally low interest rates with a credit union.

People don't like car Dealers because they don't understand how cars are bought and sold. Buying a car is horse trading, and the best horse trader gets the best deal. Just because a particular buyer may not be a good horse trader, that's not the Dealers fault. Arming yourself with knowledge when buying a car, is your best asset in horse trading. When the buyer knows as much about horse trading as a salesman, they never see it coming.

 

[coastal-boy]

Buying a car has become like buying a computer...makes little sense to wait for new models...there are always new models and better sales just around the corner. Some people prefer to save $2000 and invest 3 months searching. Time has a value. There are a bazillion things I would rather do than search for the best deal. Go shopping with financing in hand and you can never go wrong.

 

[LadyVer]

I'm interested in this as well.

 

[albertaboy]

There is no such thing as 0% or 1.9% financing. When the Dealer tells you that you are getting a 0% or 1.9% interest rate, the rest of the interest is charged into the loan up front, and you pay it believing it is part of your principle payment. If you can get a 3 or 4% interest rate from your bank or credit union, you are better off because Dealer financing at best will be 9 or 10%. Technically, they aren't lying when they say you are getting a 1.9% interest rate, because if you were to read the loan statement, it will say 1.9%. They just don't tell you that the rest of the interest was charged into the principle of the loan.

Instead of trying to figure out what the actual interest rate is in Dealer financing, compare the total payment of Dealer financed loans to bank/credit union finance loans. Banks/credit unions will usually give you the real interest rate, and the difference in the two payments is the real amount of interest charged in Dealer financing. When a person's credit is good, (stellar as you put it), the difference between the payments will usually vary only a few dollars per month, and not worth wasting the time to figure out. It is only when a person has questionable credit, (or trying to buy a car from a dishonest Dealer), that the difference in the interest rates will make much difference to the monthly payment. This is usually the case with banks; however, (depending on how much money you have invested in the credit union), sometimes you can get exceptionally low interest rates with a credit union.

People don't like car Dealers because they don't understand how cars are bought and sold. Buying a car is horse trading, and the best horse trader gets the best deal. Just because a particular buyer may not be a good horse trader, that's not the Dealers fault. Arming yourself with knowledge when buying a car, is your best asset in horse trading. When the buyer knows as much about horse trading as a salesman, they never see it coming.

No it isn't.

Cheap financing is a regular loan bought down to 0% by the Manufacturer, normally it's a given when you walk in the door. Has no effect on dealer profitability.

 

[twister947]

It's a shell game.

 

[Harold_Hill]

No it isn't.

Cheap financing is a regular loan bought down to 0% by the Manufacturer, normally it's a given when you walk in the door. Has no effect on dealer profitability.

Don't know much about the car business do you?

 

[GiggLeGasm]

Don't know much about the car business do you?

I'm not saying that every dealership is legit in how they practice, but I have received manufacturer sponsored loans and did not get hit elsewhere in the final purchase price. If you know your purchase price and understand the cost of the loan, you should be ok.

I suppose it would also be fair to add as advice,
research the integrity of the dealership you're considering. It seems that not all of them are entirely forthcoming in how they communicate.

 

[Zman1883]

The year before a big design change is a good time to deal also the dealer ceritifed pre owned are best bang for your dollars factory extended warranty.

 

[SweetErika]

My research says that sometimes the 0% Mfg financing is a good deal, sometimes not, like Harold said. It depends on the manufacturer, dealer, loan term and fine print. And, yes, of course it depends on the buyer's credit, as even totally legit low APR deals are put out as teasers to draw customers into the dealership. Most of those customers won't qualify for the extremely low rate and will end up with a crazy high rate that's far worse than what they could get elsewhere.

Lightstream is currently offering a 1.99% rate (in my area, at least - Bankrate asks for a location, so it may vary) for a 60-month loan for both new and used cars. It might be worth looking into for anyone planning on buying in the next year or so. FWIW, we'll probably go with a deal like this when we buy this year, particularly if I can get an almost-new-used car so we don't have to take the huge hit on depreciation of a new car.

 

[NippleMuncher]

When is the best time to do so?
Looking for insights from people with experience in the industry please.
Buy a 2014 model before year end? January? Does the market get even more desperate to dump them in February? Is there anything left at that point? Etc, etc.
Thanks for any tips you can supply!

If you know how to buy a car, it doesn't matter what time of year you buy one.

Rule #1 - DO NOT buy into the hype of dealer incentives, rebates, cash back, seasonal promotions, or any of the other bullshit ploys used to sell a vehicle.
Rule #2 - NEVER negotiate from MSRP, unless you like over paying.
Rule #3 - Always be armed with information! Get a copy of the vehicle "invoice" and options from your bank, credit union, or online source. This will tell you what the base vehicle cost is, and the various options packages available for said vehicle.
Rule #4 - ALWAYS start your negotiations from invoice, which is roughly what the dealer paid for the vehicle. I say "roughly" because in my experience, there will be an arbitrary amount added to the bottom line with no itemization. This arbitrary number is what the dealer is already making above and beyond their cost.
Rule #5 - DO NOT be pressured into a sale. The dealer wants to make the sale far more than you need the vehicle. ALWAYS be prepared to walk away, you owe them nothing.
Rule #6 - DO NOT let them run a credit check until you have found the vehicle you intend to buy from the dealer you intend to do business with. Every time a credit check is done, it dings your score and drives up the interest you'll ultimately pay - regardless of how good your credit is.
Rule #7 - Leave your checkbook home! DO NOT give them any money to do a search for a vehicle in your desired trim. This is a ploy to lock you into dealing with/buying from them. You owe them absolutely nothing to access information that is at their fingertips.

Buying a car is the single largest purchase that most people make, aside from buying a house. Enjoy yourself, take your time to find what you want, from a dealer that works with you to find what you need. It literally can be a simple as walking onto a lot, pointing at a vehicle, signing the paperwork, and driving away in your new vehicle. All said and done in an hour or two. Good luck.