My 13 year old SUV named Moose feels like it’s on its last legs. There’s a loud whiny noise every time I turn the steering wheel, which likely means the power steering box is cracked. Moose drips engine oil everywhere he goes and now he leaks coolant!
With a Blue Book value of only around $3,000, spending ~$1,000 to fix doesn’t seem prudent. It costs around $100 to fill up his 24 gallon tank and he only gets roughly 16 miles per gallon. Luckily I only drive about 6,500 miles a year.
The other reason why I’m looking to buy a new car is due to the advancement in safety features. Better brakes, better traction control, and more airbags would be nice. I’m not even sure my airbags work after 13 years!
One of my all time favorite things to do is spend time at a car dealer. There’s nothing like inhaling that new car smell and taking the latest models for a spin for free. All told I’ve probably visited a car dealership 30 times in the last 12 months and probably over 100 times in the last five years. Call me thorough, crazy, an enthusiast, or simply a consumer who shows great constraint for not spending any money on one of his favorite things. Whatever you say there’s nothing better than finding something you love to do that’s free.
Car salespeople probably hate me, but that’s good for those of you who are looking to get some insights into exactly when is the best time to buy a car. You see, I LOVE to negotiate. Finding sales people’s breaking points is a scintillating experience. It’s a respectful battle based on gamesmanship and false compliments e.g. “Have you lost some weight Sam? You deserve to buy this new car!”
If you ever want to work on your negotiation skills, practice at a car dealership. They are consistently some of the most aggressive sales people in any industry. This post will focus mainly on the best times to buy a car and not so much on negotiating tactics.
* Tax Season. Ask any small business owner who is not in the tax business and they will tell you that business always sees a cyclical slowdown in April. The reason being that plenty of people owe taxes by April 15. I personally owed a surprising five figure tax bill due to a retroactive law that raised taxes by 3% for those who make more than a certain amount in California. As a result, I didn’t spend money on anything other than necessities in March and April. (See: What Happens If I Don’t Pay My Taxes?) From my position as an online publisher, I see an increase in search traffic related to saving money and reducing taxes as opposed to search results relating to making more money, buying stuff, and going on vacations. Time period: March, April.
* Memorial Day Weekend. Memorial Day is the traditional start of Summer. After researching car incentives for over 10 years, Memorial Day Weekend, and the following 30 days, is the absolute best time to buy a car. One of the key reasons is that auto dealerships need to clear inventory for next year’s models which come out in the Fall. For example, the 2014 BMW 335i Coupe will come out in August 2013. This launch cycle is consistent with practically every major auto manufacture in existence. Memorial Day Weekend will also have brand new left over inventory from the previous year. These are often the best deals because you not only get a new car, you get a huge discount, and a warranty that starts at the time of purchase and not the time of manufacture. For example, I found a 2012 BMW 335i Coupe for $11,500 off to $44,700. Time period: End of May and the month of June.
* Labor Day Weekend. Labor Day Weekend marks the end of Summer and the beginning of Fall. Vacation is over and its back to the salt mines baby! A lot of people blow plenty of money during the Summer and the last thing on their mind is to spend tens of thousands of dollars on a new vehicle. Besides, folks who were looking for a new vehicle probably bought one just three to four months earlier during Memorial Day Weekend. However, because the following year’s models are now out in the Fall, current year models start looking very dated. Any left over current year models will be heavily discounted. Unfortunately, you will also be tempted by the new models! Time period: End of August, early September.
* End Of Year. There are always going to be end of year holiday sales. The best day of the year is probably the day before and the day after New Years where one day makes a car one year older or one year newer. Blue Book values plunge the first day of the New Year for example. Your new 2013 car come January 1, 2014 just doesn’t sound as new as on December 31, 2013. Time period: End of December.
If you just can’t wait for any of these four time periods, then at least wait until the end of the month. Car salespeople have quotas, and those who are lagging are the most motivated to sell you a car at the lowest of margins. It’s up to you to find the hungriest or greenest car salesperson at the dealership! The best time to refinance a mortgage very closely mimics the best time to buy a car due to similar sales incentives.
If there’s one negotiation tip I’ve come away with after speaking to hundreds of car salespeople is that you must always be willing to walk away to get the best price. Even after you’ve spent an hour negotiating, walk away for a bit and go through the pros and cons. Get some lunch or literally go for a nice long walk. During this time period of wait, your salesperson will be wondering if you’ll ever come back. He’ll start doing the math on how much lower he’ll be willing to go if you do come back.
If you’ve decided now is the time to buy the car, go back and wait until he offers something extra before you start negotiating again. You should already have in mind through online research what the invoice, MSRP, and second hand price are for the car you like. Now it’s a matter of you being patient enough to get the deal of the year!
As for replacing Moose, I brought him to my trusty mechanic of 11 years to see what was wrong. He told me that I needed to replace my power steering pump and hoses as expected. Given that he’d have to take off the radiator to get in there, I told him to also replace my serpentine belt. You’re supposed to replace the belt every 100,000 miles and Moose already had 120,000 with no change! All in all, the cost came out to $880 vs. $1,600 if I were to take Moose to the dealer. Please never go to the dealer for service. If my mechanic said I’d have to spend more than $1,000 I would sadly have traded in Moose for a newer vehicle.
Related: Follow The 1/10th Rule For Car Buying
Lower Your Auto Insurance Costs: Check out Esurance online. They have some of the best plans with the lowest rates around due to their lower overhead costs. It’s worth spending a moment filling out a quote to see if you can save some money. Car insurance is one of the largest ongoing expenses for car owners. Esurance has good driver discounts, and multi-product discounts as well.
Updated for 2021 and beyond.