It’s no secret that the best time to shop for a new car is between Black Friday and New Year’s Day. But what about a used car? A brand new car may not be what you are looking for – whether you need a second car for your family, a car for a new driver, a work truck, or something that you can use as a commuter vehicle – sometimes pre-owned cars are the way to go.
It may seem like a stretch to spend a large amount of money right after the holidays, but January is the best month to buy used vehicles. And here’s why:
Many new car dealerships run great specials on vehicles in December to make room for new-year inventory. This means they have a lot of used vehicles on their lot that they want to sell. In order to make room for new cars, these dealerships will likely have the used cars on excellent sales and provide low prices with attractive financing.
Given that over 1/2 of new car sales involve a trade-in and resale takes an average of 45 days, dealerships will be eager to get used vehicles off their lot, meaning the buyer has the upper hand in negotiating deals and better prices.
After the holidays and going on spending sprees, many people tighten their wallets in the new year. People use what extra money they do have (after paying off credit card bills and debts) towards less frivolous things.
However, car dealerships still have to make money and meet sales quotas. This means one thing: A buyer’s market. Dealerships and salespeople are eager to close deals and make sales, making January a great time to negotiate a better deal. This will even extend into February and even March until people have paid off their debts and reenter the retail world.
Many people lease cars at the end & beginning of the year, which means many 3-year-old vehicles are available for resale in January. These vehicles are generally in great condition and will be “restored” to like-new condition. Since the mileage is lower than many used cars, you can find a steal – a newer model with low mileage for an exceptional price.
If you are shopping for a sports car or luxury model, chances are, you’ll land the best deal during the winter months. There is little supply-and-demand for sporty little cars with convertible tops or flashy little cars not suitable for harsh winter roads, which means you will likely get your pick of the best luxury vehicles for a much lower price than if you wait for the weather to get warmer.
Typically the more expensive cars on the lot, come January, these sporty little models suddenly drop in price and become more reasonably priced and the best deals out there.
When the clock strikes midnight on New Year’s Eve, used vehicles suddenly become one year older meaning their value drops, and sometimes that drop is significant. For instance, Edmunds says the typical 2009 model sold for $19,392 in December 2012, but $18,738 in January 2013 – a 3.4% price drop in just one month.
This is true for models that are only 1 or 2 years old as well – you can find an “old” model that is just 2 years old, and in most cases, it will be in mint condition with just some miles put on. For this upcoming January, look into 2017 models instead of a 2018 model and you’ll be shocked at how low the price is compared to its 2019 counterpart.
Oftentimes, the finance deal the dealership will offer you isn’t the best you can find – especially in the new year. A lot of banks, credit unions, and regional banks will offer financing incentives in the new year for existing customers. Contact your bank to see what deals they are offering and if you qualify for low-interest rates. There may be discounts available if you enroll in auto-pay or use an existing bank account for the monthly payments.
Before settling on a pre-owned vehicle, be sure to look up what the MSRP was for the vehicle originally, and if there is any resale information. This can help you negotiate prices and deals in the long run. The most important thing to keep in mind is to have a set price that you cannot go over. No matter how great a deal, if the deal is more than you are able to spend, it’s not worth it. Never overspend just because a dealership is pressuring you to sign a deal to help them meet their quota. Keep shopping around – you will find the best deal for you!