Why the Holidays Are the Best Time of Year to Buy a Car
As an auto auctioneer and former part-owner of an auto auction where cars were sold at a rate of over 100 vehicles an hour, I have seen hundreds of thousands of near-new and older used cars, from Acuras to Volkswagens, become their absolute cheapest at one specific time of the year. When is it? Every week I get this question in more varieties than Baskin-Robbins has flavors.
There are several seasonal factors that come into play between Labor Day and the post-Thanksgiving consumer bonanza that is Black Friday. The net effect? The holidays are unequivocally the best time to buy a new or used car.
Next year's cars get shipped early, so current-year models get cheaperMost "next-year" models begin to trickle into dealer showrooms around early September. By October, this trickle turns into a million-vehicle flood, and that means the current-year models, which are oftentimes virtually identical, get thousands of dollars in rebates and incentives that make them far more attractive deals.
If you're the kind of owner who likes to keep a car for eight years or longer, the few hundred dollars in extra depreciation you may experience after selling that 2016 car down the road, in 2025 or 2026, will be dwarfed by the thousands in savings you'll get from buying that current-year car that is loaded with discounts, which is still pretty much brand new.
Most people don't car shop on Black Friday, which makes it the perfect time to find a good dealLabor Day weekend is a huge advertising boon for auto dealers, along with other annual events like Memorial Day, the Fourth of July, and Christmas. By contrast, late November tends to be pretty horrific for new- and used-car dealers because most folks are just beginning their Christmas shopping, using Black Friday to score cheap consumer goods and tech gadgets. The only chance a dealer has to get eyeballs on cars is to create a blowout sale for leftover 2016s. Thus, Black Friday is a surprisingly easy time to find a great deal.
People are eager to sell their cars to get extra cash before ChristmasA lot of so-called "toy" cars, such as convertibles and roadsters, get offered for sale right around early to mid-November by folks who happen to have limited Black Friday and Christmas funds. The same is true in those families where an extra car (i.e., one that doesn't get driven very much) looks less attractive parked in a driveway than a bunch of expensive presents parked beneath a tree. Not only will you find a surprisingly great selection, owners are oftentimes more willing to negotiate in time for Christmas.
The worst time to buy? Tax refund season.I buy an awful lot of $1,000 to $2,000 cars at dealer auctions during October and November that would otherwise be between $2,500 and $4,000 during any other time of the year. I then sell them for a considerable profit during mid-February and late June, when the used-car market is heavily impacted by a financial tsunami called "tax season." Tens of millions of people will receive a substantial tax refund from Uncle Sam and get it in their heads to buy a car. Prices for used cars in particular shoot up, turning a lot of $1,500 rolling turds into $2,500 financial catastrophes.
By the end of summer, that market heat dies down, prices resume normalcy, and the cycle starts anew.
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