That is a question I was asked more than any other by people I met (and still meet) while working in the car business. They were sure I had the inside scoop. From 28 years of experience as a salesperson and as a high-level manager, I knew the best time of year and month. I also knew what factors go into incentives and the Dealership’s position on when to run a sale on certain models, and when to take a deal or not. It’s a combination of a few things.
- Incentives: First and foremost, incentives amount to the biggest consumer discount available to get you either the lowest purchase price, the lowest interest rate, or the best lease rate, which will determine your payments. Unless you pay cash, it’s all about the payments anyway. Incentives come from the manufacturer (think Ford, Honda, Toyota, etc.) either as a direct consumer discount like a rebate, low-interest rate, or lease specials. The manufacturers also give incentives to the dealers as the form of dealer cash, to help move stale or too much inventory.
- Salesperson: Unless you have your own car guy, or have a friend in the business, your salesperson will be your ticket to either getting a great deal or paying too much. Salespeople are paid to sell cars, either by holding gross profit, or selling volume. That’s how they make a living and keep their jobs.
- Dealership: Let’s face it, Dealerships need to make money, just like any other business to keep the doors open. They have lot’s of profit centers, whether it’s the profit on the sale of the vehicle, the finance reserve (what they make off the financing), parts, service, accessories. They need to have the volume to stay in business.
- Vehicle Choice: Some cars are better than others. Some are more popular, hold more resale, have more or less supply, have more or less competition, and have too many or not enough Dealers. All of these factors can affect the selling price.
- Time of Year: Selling cars is a cyclical business. They have their slow months, and their busy months, doesn’t matter where they are. A lot of traffic is generated by Manufacturer rebates, and lease maturities (when the market gets flooded with off lease used cars).
- Time of Month: Depending on inventory levels and volume in any given month, the last week sometimes is a catch up to try to make a profit in a Dealership. This can work for or against you. They might be discounting their product more, but making up for it by increasing the profit in the other areas of the store.
Whether you are buying a new or used vehicle, there is no one easy answer. Just like you do your research when you buy something off Amazon or eBay, you need to do that and more when it comes to buying a car. Spend some time communicating with several internet salespeople before you set foot in the door, and do your homework. They can tell if you do, and it will save you a tremendous amount of time and money. Don’t bother with buying services, you can get a better deal yourself just by shopping around.
Here is my cocktail party speech (Although I never go to cocktail parties) when asked when to buy a car.
The biggest Manufacturer incentives come at the end of the year (think December) to get their sales ranking higher than others. (The brag factor). Try to get a hungry salesperson, the one who needs a sale, they will work the Manager for more. The Manager is the one who decides on the price, terms, and trade. Never go in the first week of the month. Everyone is tired from the previous month, and the end of the current month is too far off to worry about the results. You won’t be able to negotiate as much. If you are willing to be flexible on the model, try to pick something that they have plenty of inventory. It’s a supply and demand issue just like everything else.
Never set foot in a Dealership until you have done your research, and have gotten firm commitments from several Dealers. If you walk in cold, your odds of getting a good deal go way down. Be careful of your car guy if you have one, or someone referred to. When you let your guard down and don’t shop to keep them honest, they will probably take advantage of that. It’s a well know fact that your previous customers are your highest gross customers.
Don’t let yourself get emotionally involved. If you fall in love with a car or think it’s the last one on the Planet, you just set yourself up. Car are like potato chips, they will always make more. If I can leave you with one thing, take your emotions out of it, shop the internet, and never take their first offer. You will never get the best deal until you stand up to leave or walk out. It’s that simple.
Last and the most important thing. Read my book available on Amazon. $0 if you have Kindle Unlimited, $3.97 for a download copy, or $7.95 for a paperback mailed to you in a couple of days. (Who says I can’t sell anything anymore).
If you find this helpful, and know of someone who is looking to buy a vehicle, please share it with them. If you got something out of it yourself, please like. I appreciate you reading my post. Thank you.
Best of luck if you are getting a car, new or used. Hope you save a ton of money…..
Here is the link…………………..……..