After several years of record sales, it appears that new cars are no longer flying off the lot. April sales were down 4.8% over last year — the biggest decline so far in 2017 — according to car shopping site Edmunds.com. This isn’t good news for carmakers, but bargain hunters might get some great deals because of low-interest financing and other incentives.
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But sales downturns aren’t the only marker of the best time to buy a new car. New-model rollouts, carmakers’ redesign schedules and other events can offer bargains to those who can read the tea leaves of the auto market.
Just picking an opportune time to shop isn’t enough. First, cover the basics: Arrange auto financing, check local dealer inventories, and research pricing guides for the current market value of your desired vehicle.
Then, consider these five time periods when planning your purchase to snag a bargain.
1. Model changeover
The big three U.S. carmakers usually launch their new models during August and September while some foreign carmakers sprinkle new-vehicle introductions across the year. Most buyers are drawn to the newest models, which pressures dealers to offer deeper discounts and incentives to clear their inventory of the previous year’s models.
Dealers need to clear out the current year’s inventory to make room for incoming models, according to Jessica Caldwell, an analyst at car shopping site Edmunds.com. That’s good news for shoppers who will see some great deals on outgoing models, she says.
Furthermore, it means that “as a consumer, I’m not going to have to arm-wrestle or play the back-and-forth game to get a good price,” says Dave Cavano, AAA’s car buying expert. Dealers “are much more likely to cut to the bone more quickly — so it’s less of a hassle.”
Cavano warns that buyers shopping for newly redesigned or recently introduced models will pay dearly for wanting to be the “first on the block to own that car.” Manufacturers “trickle out” a few vehicles for each dealer to drive up interest. Eager buyers will have to pay sticker price and sometimes a bit more.
2. End-of-month pressure
“Of the 30 days in the month, traditionally, the last five days are when the dealers have the greatest incentive” to make a deal, the auto club’s Cavano says.
This is because some carmakers offer bonuses that increase when dealers hit certain sales numbers, says Christian Wardlaw, an analyst for the New York Daily News’ autos section. “Dealers know they can take a loss on that vehicle because they know they’ll get the bonus for hitting their quotas,” Wardlaw says.
These kinds of bargains are more common at high-volume domestic dealers. However, it’s hard for the average consumer to know which dealers are facing the pressure to hit quotas, notes Steven Szakaly, chief economist for the National Automobile Dealers Association.
Shopping at the end of the month can help you better your odds. “You’re hoping you are the lucky person who walks in at the end of the month and the dealer is missing the one sale he needs,” he says.
3. Year-end sales
The final week of the year brings sales, particularly from luxury carmakers such as Lexus, Mercedes and BMW, Cavano says. It’s when “manufacturers are trying to eke out those last few sales … and they will push money out to their dealers and say, ‘OK guys, let’s get this done.’”
Keep in mind, however, that as the year progresses and more cars are sold, the selection shrinks. So you might not be able to get your first choice of color and options.
4. Model redesign
Manufacturers periodically redesign their vehicles, creating a situation in which they have both the outgoing and new models for sale at the same time. In some cases, this makes dealers and manufacturers eager to get rid of the outgoing model by offering high incentives and discounts.
But if you buy the outgoing model, its value would depreciate faster. This isn’t a problem if you plan to keep the car until the wheels fall off. But if you trade it in just three years later, you will take a big hit.
And sometimes, the new model may be “heads and tails better than the outgoing model,” Wardlaw says.
5. Last year of a model’s production
This tip is for serious penny pinchers. When a car is being discontinued or “rebranded” as a different model, the outgoing model’s prices drop even more dramatically.
The timing on when not to buy a car follows a simple pattern, according to these experts. When sales are strong and there is plenty of foot traffic on the car lot, the dealer will keep prices higher, believing there will be a better offer from another shopper. So weekend afternoons aren’t optimal because besides higher pricing, the sales staff will be busy and test-drives will be rushed. Instead, shop midweek, communicating with dealers via text or emails.
Swapping advice about car buying is a great sport for buyers, and Wardlaw has a final recommendation: Don’t be lured by the promise of crazy deals. “When it comes down to it, the best time to buy a car is when you really need one,” he says.
Philip Reed is a staff writer at NerdWallet, a personal finance website. Email: [email protected].
This article was written by NerdWallet and was originally published by The Associated Press.
Updated May 9, 2017.