What’s the Best Time of Year to Buy a Car?

Shoppers looking for the best deal on a new vehicle are typically advised to wait until the end of the year, as automakers traditionally offer the most generous incentives around Labor Day or in the final few days of December. However, everything is still a little off-kilter at the moment as dealerships recover from pandemic-era inventory shortages. While the new-car market is starting to bounce back, seasonal incentives are still much rarer than they used to be, but there is light at the end of the tunnel.

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“Whether it’s been Memorial Day, July 4th and other holidays, we haven’t seen [the holiday-incentive push] to the same extent as pre-COVID,” said Tyson Jominy, vice president of data and analytics at J.D. Power. “Incentives are certainly rising, but this is one element that has not returned to normal among everything else: Holiday incentives remain selective.”

With that in mind, let’s take a look at the seasons you should keep an eye on if you’re shopping for a new car.

Incentives: Not Just for Seasons Anymore

With fewer vehicles to sell during the pandemic, automakers dramatically scaled back on incentives — but new-car availability is finally starting to come back. Incentives are coming back, too, even if they often aren’t tied to a holiday. On Cars.com, we’ve seen sharp increases in new cars available for under $30,000 as well as electric vehicles. EVs in particular have seen enticing incentives to help move them off the lot, and newly revised federal tax credits are easier for consumers to access at the time of purchase.

Automakers are pumping out vehicles in popular categories the fastest and offering holiday-agnostic incentives to help them sell. At the time of this writing, the average amount of incentives offered on mid-size SUVs was $3,500 per vehicle, according to J.D. Power’s data, while compact SUVs have average incentives of about $3,300 per vehicle, and light-duty pickup trucks, with their higher average prices, are seeing incentives of about $5,100.

“There’s a lot of incentives out there for consumers, even before we get into potential add-ons for Labor Day,” Jominy explained. “Their base-level incentives are fairly high because inventory levels have bounced back.”

Seasons to Remember

Dealerships haven’t completely abandoned the calendar, though. As inventory continues to recover, expect seasonal deals to make a comeback. Many automakers start production of the next model year in late summer, and dealers want to make room for these new models by moving the outgoing model year’s vehicles off the lot, so Labor Day is historically when some of the biggest deals are offered.

“A typical Labor Day-type promotion would be $500 bonus cash, or in some cases, $2,000 or $3,000 in customer cash on the hood,” Jominy said. “So far [this year], it’s been kind of quiet, but incentives are certainly ratcheting up very quickly.”

Another season to watch for sales is the end of the year, specifically between Black Friday in November and New Year’s Day. This is a boom period for incentives on premium and other more expensive vehicles like pickups, as it helps dealerships move their pricier inventory before the vehicles further depreciate on their lots.

“Lexus’ December to Remember started it all and turned December into a massive selling period for premium vehicles,” Jominy explained. “I’ve never gotten a car with a red bow on it, but it seems to work.”

At the moment, though, we’re in wait-and-see mode to see exactly how strong these additional incentives may be, as we’re not completely out of the woods with inventory shortages yet.  Among Cars.com dealers, new-car inventory is still down 24% from approximately 3.1 million vehicles to around 2.4 million from July 2019 to July 2024.

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The Best Time to Buy Out Your Lease or Sell Your Car

While shoppers shouldn’t expect seasonal cash incentives to be as big as they have been in previous years, they can still use timing to their advantage. This is especially true for those leasing a vehicle and considering buying it out. Since used-vehicle prices have soared due to the shortage, buying out a leased car can be a smart move in 2024.

“That buyout price you were offered three years ago that you may not have thought much about is potentially the best offer you will find,” advises Jominy. “Many lessees will find they are in a positive equity position that they can use as a down payment on their next vehicle.”

The same goes for shoppers who have a car to trade in or sell. While used-car values peaked at the height of the inventory crunch in 2022, it’s still a good time to sell or trade in an extra car. For example, the average trade-in price for all used cars in 2024 was $28,729, up from $22,979 in pre-pandemic 2019, per AccuTrade data. Even with fewer seasonal incentives and today’s high interest rates, buyers can offset higher prices in other ways, such as shopping around for a competitive financing rate and getting multiple offers on their current car to be used on the down payment for a new one.

When to Shop for Used Cars

While things are starting to look up on the new-car side, used cars are another story. Desirable low-mileage, three-year-old cars coming off a lease are a major source for replenishing used-car inventory. With fewer cars to sell during the pandemic, leases essentially came to a halt, and used-car prices shot up dramatically. As more new cars return to lots and alleviate some of that pressure, it’s left the used-car market in a weird position where both the prices and availability are decreasing at the same time.

“The volume [of used cars] is going to continue to contract throughout 2025, and it’s a slow rebound from here, too,” Jominy said. “We’re talking the end of the decade before we see used volumes like we were seeing in 2020.”

The biggest seasonal car promotions outside of some high-end used-car leasing deals are mostly on new cars, Jominy explained, but that doesn’t mean holidays don’t play a role in the best time to shop. It’s a phenomenon we already saw this spring as tax refunds pushed more buyers to purchase new cars. A bump in new-car sales also meant an increased number of traded-in vehicles that ended up on the used market.

“It takes dealers a couple weeks to turn around trade-ins and get them ready to sell again,” Jominy said. “Typically, we’ll see an influx around these big holidays of trade-ins, and then a month or two after the big new-vehicle sales period, you see a bump in used [inventory].”

With Labor Day sales, for example, used shoppers may want to hold off until late September or early October for a wider selection — and thus, a bit more room to haggle on the price.

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