Buzz
Almost every business is offering a Black Friday discount, and car dealerships are no exception. Even if purchasing a car wasn’t on your radar, the end of the year has built a reputation for being a good time to do so. If you’ve been considering a new car, those seasonal deals might make you think twice.
According to Jessica Menton from USA Today, used car sales are increasing while new car sales are declining, making dealerships eager to clear out their remaining stock. Additionally, federal rate cuts this year have resulted in lower car loan interest rates.
But does this mean you should hurry to make such a significant purchase during one of the busiest and most expensive times of the year?
I spoke with David Bennett, manager of repair systems at AAA, who confirmed that the end of the year is actually a great time to buy a car. He explained, “Dealers may lower [prices] to clear out vehicles from their inventory, helping them save on taxes tied to year-end stock,”
You might have heard the old belief that the best car deals happen when the new model year arrives, but that's a misconception. The real savings happen according to the calendar year. However, not every price tag you see should prompt an immediate purchase. Here’s what to keep in mind if you’re considering buying a car.
Do your homework before you head to the dealership
Bennett recommends starting your research now to be ready when a “good deal” presents itself. Begin by looking up the make and model you want, and check the manufacturer’s website for pricing details. This will give you a clearer idea of what you can expect from dealerships. Additionally, these websites will highlight any discounts or promotional offers available for your desired model.
Many dealerships offer a gift card of $50 or $75 just for test driving a car, but this is a strategy to draw you in. If you’re not ready to test drive yet, ignore these “offers” and focus on the discounts provided by the manufacturer first, then look at the dealership’s online deals. Once you subtract those from the car’s retail price, you’ll have a better idea of what the true deal looks like. This will help you spot a real bargain during Black Friday.
Avoid depending on the dealership for the best financing deal
While interest rates have dropped, don’t assume you’ll automatically score an incredibly low car loan rate. Your interest rate will largely be determined by your credit, so adjust your expectations accordingly. Bennett recommends car buyers seeking financing to get preapproved for a loan before hitting the dealership to know your upper spending limit.
Once you’re at the dealership, “The loan rate can serve as a bargaining chip when negotiating the car price,” Bennett explained. A 1% savings on your interest rate might seem small when signing paperwork, but over time, it could save you a substantial amount of money.
Resist the urge to buy during a sales event
Even if you’re eager to purchase a car, Bennett advises not to let emotions take over. You don’t need to negotiate with salespeople and get pushed into paying more than you planned.
If the offer isn’t right for you, don’t hesitate to walk away and continue reconsidering your decision. “Keep in mind that you’re the one in charge of the purchase,” Bennett reminded. “You can exit the negotiation at any time before finalizing the deal.”
This post was last updated on 11/26/19 to provide clarification on a quote by David Bennett about discounts on car prices.
