Is The End Of The Year Really A Good Time To Buy A Car?
MINNEAPOLIS (WCCO) -- It's been 20 years since Lexus first put red bows on new cars during the holidays. That move helped changed how the entire auto-dealer industry operates this time of year.
Nowadays, all kinds of car deals are offered up in December. So, is the end of the year really a good time to buy a car? Good Question.
"With inventory levels the way they are, the factories are incentivizing, so it makes a great time and better value for purchasing," said James Flynn, sales manager at Richfield Bloomington Honda. "We've been incentivized to be very aggressive."
The last two weeks of December are among the busiest time of the year for car dealerships. Not only are there businesses buying vehicles because of tax purposes, there's a lot of marketing bringing people in the doors, and people purchasing cars as gifts.
A few Christmases back, Eric Wenzel bought a new Honda for his wife, complete with the red bow.
"We were in the market for a new vehicle -- now is the time to do it -- why not have fun with it," Wenzel said. "There's usually great deals at the end of the year for cars."
Flynn says customers have been conditioned to believe that dealerships need to push out the old models to make room for new ones this time of year. He says while that sometimes happens, production schedules have now constantly changing so that new models are coming in all throughout the year.
"It's a moving target, rather than standard and fixed," Flynn said.
This year, many dealerships have plenty of inventory, which means manufactures are offering deals on most models, even the popular ones.
"Dealerships and the industry really count on December to anchor the year," said Jeremy Acevedo, a senior analyst of industry insights with the car research company Edmunds. "A lot of the time what makes a really good year happens in December."
Edmunds estimates savings this December are about $4,500. The average cost of a new car is now $38,000.
"In December, that's kind of something that's exclusive to this month," Acevedo said.
Flynn said what a buyer ultimately pays can depend on a number of factors, including the overall car market, a vehicle's availability and the manufacturer's production schedule.
"With the internet now, most of the dealerships are pretty close on pricing," he said. "It comes down to a difference of $250."
Negotiating can make a difference as well, according to University of Minnesota retail expert George John. Some dealerships no longer negotiate, but of those that do, John reminds potential buyers that the price, the trade-in and financing can be negotiated.
Flynn points out that the dealerships will start to really get busy the last week in December, so if a person if looking for a specific type of car, it's better to come in early.
