Car manufacturers are busy each year in December, promoting year-end vehicle specials to try and capture their share of the holiday spending frenzy. But while December may be a popular vehicle-buying month, there are some reasons you may want to wait until January to sign on the dotted line.
It can seem counterintuitive to make a large purchase in January, but the reason for this comes from a confluence of factors that affects car sales year-in-year-out.
Drop in prices
Precisely because December is a busy sales month, car shoppers can be well-advised to hold off until January. Statistically, dealers drop their prices to meet declines in consumer demand. When the frenzied December auto sales drop off in January, the sticker price at dealerships can start dropping too, making it the perfect time to buy that newly discounted vehicle. Bear in mind, too, that you can often still capitalise on year-end incentives that are lingering in early January.
The December deals offered by many car manufacturers typically extend through the first week of January. If you shop smart, you can potentially take advantage of those holiday incentives while also cashing in on already lowered January dealer prices.
Slow Month for Retail
The free spending of the holidays causes consumers to tighten their belts with the onset of the New Year, resulting in expensive items like cars, going unsold. Retail analysts have long pinpointed January as the best month to buy major appliances, and the same rationale can inform strategic vehicle purchases.
Despite the fact that January is a slow month, car dealerships still have to make money. Because of this, vehicles occupy a buyers’ market, with salespeople eager to close deals and met their quotas. This rationale doesn’t just apply to January – with great deals on cars also available in February and early March.
Any 2018 models still on the lot in January 2019 will need to get sold, fast, if dealers want to realise a return on their investment. Car dealers make the most money on the newest of cars; if a car remains unsold more than a full year after its debut, buyers can expect huge savings off the sticker price. Dealers make short deals and ensure they hit their quota. Additionally, there can be temporary dealer rebates to clear out a model year, so dealers can sell a vehicle for less when they have the use of incentives.
Other tips to save
If you plan to take advantage of the special incentives that January offers to car buyers, you may as well utilise additional strategies to save even more money. The time of week and month can make a big difference. Avoid weekends, as a rush of customers will make salespeople less likely to deal. Likewise, you will find much more amenable salespeople at the end of the day, as opposed to the morning or early afternoon. When you begin your search for financing, try captive finance companies like Volkswagen Financial Services, which provide in-house financing for all Volkswagen Group cars.
Lastly, always come to the dealership prepared with an amount that you can spend and an idea of the type of car you want. Regardless of how great a deal appears, do not let yourself get talked into more car than you can afford. The perfect car becomes even better when you get it at an amazing price – in January or any time of the year.