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New cars follow a buying cycle. Why is this crucial to you? When you time your buy you get the best bang for your car-buying buck! When is the best time to buy a new car, truck, SUV or crossover? The answer is easy…”it depends”. Let’s look at the three main buying seasons and three main types of buyers. The three main buying seasons? Here you go: (1) Year-End Clearance: The new models roll in to the dealer’s inventory anyplace from late August to September. Dealers must now deal with the current model year inventory that is costing them cash and taking the focus off the new models. For this reason incentives on current models ordinarily peak in order to clear out old inventory. (One of the intents of rebates is to compensate a buyer for depreciation. More on that later.) (2) December: Believe it or not, the last week of the year is quintessentially the best week of the car-selling season. Blame, or thank, the merchant for this anomaly. Dealers have planted the conception that you get a better car deal if you buy at the end of the month. Managers need to hit their sales goals, salesmen need to hit their numbers, on and on. So what better time to buy than the last week of the last month? Manufactures likewise show up with huge incentives and promotions. (3) Truck Month: Usually March, this is a time when manufacturers spotlight trucks and SUVs. Now, let me introduce you to three types of buyers: (1) There’s Steady Eddie: He buys a vehicle each seven years, runs the wheels off and is ready for another vehicle after two hundred thousand happy miles. (2) Then there’s Les Miles, he lives next to the Jones’ and makes sure he not only keeps up with his neighbor, but is always one step ahead. He trades out each two years, or whenever the Jones one-up him. Like Eddie, he takes out a established car loan, 48 to 60 months, depending on what fits. (3) Finally, there’s Angie Dot Com, a high-tech single who would not be caught dead in a vehicle out of manufacturer’s warranty. She never met a vehicle he didn’t want to lease. Eddie, the keep-it-forever buyer, Les, the trader, and Angie, the leasing lassie, genuinely went to high school together and, after imbibing too much alcohol at their ten year high school reunion, made a pact to support each person through their car-buying experience. The timing seamed perfect. Eddie’s 2001 Impala had 220000 miles, Les was burning to get a new sedan with Bluetooth Phone capability and Navigation, and Angie’s lease was coming due. So the three of end up standing in front of a stretch of 2008 and 2009 sedans while visiting a dealership in early September. Eddie is eying the basic trim, Angie is drawn to the mid-level trim and Les walks right over to the loaded vehicles. Eddie sees the $7500 off for the 2008 model and he’s both feet in. Here’s how the speech goes: Eddie: “What luck! This is perfective timing! These are better discounts than I could have imagined. I’m driving that ’08 silver one home today! You better graduate one Les, while they’re still available.” Les (not impressed): “I would never drive the “old” model. It’s already one year old! I trade each two years. If I buy a 2008 and trade it in two years, I’m merchandising a three year old vehicle. If I buy the 2009, in two years it’s only two years old. You may take whatsoever I save today, by buying an ’08, rather than an ’09, and flush it down the drain when I trade in two years when the ’08 brings in less than the ’09. Besides the 09 has features the 08 doesn’t have.” Eddie: “Hey, what do I care with regards to depreciation…when it comes time to trade my car I’m bringing it in on a tow hook. So buy the 09 and quit your sniveling.” Les (turning up his nose): “Just because I trade out a lot doesn’t mean I don’t look for deals. I’m waiting until December. The dealers aren’t going to put a lot of effort in discounting the 09s when the 08s are right besides them. Besides, December is a great time to buy.” Les: “This is your moment, Eddie.” He turned to Angie. “What in regards to you. You ready to buy?” Angie: “I lease. I like the 09s but the manufacturers’ commonly wait until January to put special and significant stress on their leasing programs.” Eddie: “Good grief, Angie, look at the discounts! Why don’t you just lease a 2008?” Angie: “Sounds good…but the 2008s are already one year old. The residuary values would be in the tank, so, if there was still a leasing program out there it wouldn’t be worthwhile. I like to get in a vehicle in the firstborn or second quarter, I’ve found it’s the best combining of strong residuary values and factory incentives. Eddie: “I knew that.” In the car-buying world, one size does not fit all. In our example we have three buyers-all wanting to buy a vehicle-but each knowing that their optimal buy experience will come for the duration of a sure time of the year. In closing I’ll give a car-buying calendar. We commence with the birth of the new model. In this example we’ll use the 2008 and 2009 models. August – September: The 2009s arrive so it is Year-End-Clearance for the 2008s. One of three main car-buying times. Great time for buyers, like Eddie, who keep their vehicles for a long amount of time of time and don’t care when it comes to depreciation. Selection for 08s are still good, as are the deals. October-November: 2009s are filling in, 08s are being weeded out. Deals are still good for 08s-when they’re available. Whatever further and added incentives there might be are normally offset by lack of selection. December: One of three main car-buying times. Buyers suppose deals and dealers/manufacturers-who are always looking for a good reason to sell-are ready to oblige. 08s ought to be gone, so special importance and significance may at long last be focalized on 2009s. January-February: Hang-over months for regular purchases but good months for leases. Residuals-the approximated value of the vehicle at the end of the lease-are strong and makers are looking for a reason to target buyers who missed the December rush. March-April: One of three main car-buying times, with special importance and significance on trucks and SUVS. This is the time when most makers run their version of “Truck Month”. 2010s are far sufficient away that buyers are not concerned with losing residuary value, and promotions are strong. Leases, peculiarly in March, are still good. (Lease values ordinarily change by the “quarter”, not the month. Therefore residuary values for vehicles are the same for March as January because they are in the same quarter.) May-July: Incentives begin to improve as we head to another model year in August. Days are long and weather good to dealers get a lot of floor traffic. Young people graduate and need transportation for jobs. Keep in mind that this is a “seasonal” look at the car business and, for most of our country, we know that season’s now and then experience irregular weather. I expended time in Texas, for example, and you might wear long johns one December day, then a golf shirt the next. What I’m saying is to not ignore the obvious. If times are genuinely tough manufactures may dig out the promotions early, or extend them beyond normal times if the effect wasn’t realized. Likewise, the “good deals” are less when demand for vehicles is high. Hope you are assisted by this overview! |
Tag Archives: new car buying - Page 2
January Is A Good Month To Buy A New Car
Posted by Nazimabee Woozeer
on July 5, 2011
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