The Best Time to Buy
When is the best time to hunt down a good deal? That's a good question, given the throng of promotions that spring up at car lots, including summer discounts, year-end clearances and model-year blowouts.
Those deals can come in unpredictable spurts, driven mostly by the automotive industry's current waters, but experts can point out a few recurring times when deals are best.
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Manufacturers don't wait until January to start selling the cars of the new year. That usually begins around August or September of the previous year, said J.D. Power and Associates analyst Tom Libby.
Around that time of year you'll start to see the familiar "model year" sales, when dealerships try to clean house for the coming year. If there's a glut of cars from the current year — which may signify a slow-selling model — the discounts could skyrocket.
"Just as new models come out, [dealers] have to get rid of a lot of old inventory and prepare the floors for the new models," said Fritz Elmendorf, Consumer Bankers Association spokesman.
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If a redesigned model is on the way, discounts on its lame-duck predecessor often run deep. When Dodge's redesigned 2009 Ram 1500 pickup hit showrooms in late summer 2008, for example, the automaker offered $6,000 cash back on the 2008 Ram 1500.
If a model has been discontinued, prices can drop even further. Pontiac's Grand Prix hit the chopping block after the 2008 model year, and was given a $2,000 cash-back discount.
Outgoing models aren't the only discounted ones. "Sometimes they'll put a $1,000 or $500 rebate on [a new] vehicle just to spur interest or demand in the vehicle," said Rob Gentile, director of auto pricing at Consumer Reports.
That appears to be what happened with the Dodge Journey crossover SUV. When the new Journey models arrived in summer 2008, they came with a $1,750 cash-back discount right off the bat.
Stay informed on discontinued or redesigned models with Cars.com's blog, KickingTires.
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Just like the end of the model year, the end of the calendar year is a good time to buy. Automakers often look to close the year with strong sales as they prepare for January and February — traditionally bleak sales months in the car business.
"As you get into December, you see some of the manufacturers out there trying to win market share for the end of the year," said Rich Porrello, regional manager for dealer sales at Columbus, Ohio-based Huntington Bancshares.
The pace of discounts can be especially frenetic if dealers are trying to hit specific quotas.
"Everybody is trying to hit objectives," J.D. Power's Libby said. "They set up targets at the beginning of the year. ... I don't know if it's so much shareholder-driven as it is objective-driven by objectives they set at the beginning of the year."
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Gentile said spring is another good time to shop, but seasonal discounts are becoming less common. "Now it's less about the season and more about what's happening in the industry and what's happening with the manufacturers and the dealers," he said.
In short: If you're looking for a deal, keep an eye on the news. Gas prices shot up in 2008 and shoppers ditched SUVs and pickup trucks to the point where dealer lots were filled with stagnant inventory. Cash-back incentives were very generous on pickups and SUVs, and a GM Employee Pricing program had the company offering $9,000 off the Hummer H3.
Automakers itching for more customers could issue widespread discounts in an effort to regain their footing, and it's unlikely that those who have a legacy of sales incentives, particularly the Detroit Three, will stop the flow anytime soon. Cars that are selling well, on the other hand, are much less likely to carry discount prices.
"It's supply [and] demand," Porrello said. "You're going to have bigger incentives on a vehicle you have bigger supply on and a bigger profit structure, so obviously the hot cars are going to have very little incentive on them."
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