When is the best time to buy a car? The best time to buy a new or used car in towards the end of, March, June, September or December. The reason for this is that dealers will have quarterly or yearly targets to meet.
Hitting these targets can be worth hundreds of thousands to franchised dealers in both manufacturers and finance commission bonuses. The sales managers, business managers and the sales executives may also be inline for an additional payout if these targets are met. So the whole sales team will be highly motivated to sell cars and offer the best deals at these crucial times of the year.
Sales targets will apply to both used and new cars as well as finance targets. Sales executives and business managers will also have targets set for other products such as paint protection, alloy wheel repair and GAP insurance. If a dealer can upsell enough of these products they will normally receive another additional bonus.
How do you get the best deal?
Firstly timing is everything. A dealers will normally need to have a car payed for and in some cases delivered by the close of business on the last day of the quarter. Meaning if you turn up at a dealers at 6:30pm on the 31st of March you are going to be hard pressed to get a deal done.
There are a number of reason for this. Firstly selling and processing a sold car usually involves a huge amount of paperwork for a sales executive, this paperwork often takes longer than the sales process and will need to have been completed before a car is considered sold in the eyes of a garage or manufacturer. They may still have other cars from earlier in the day or week that need to be delivered or processed, and may just not have the time to sell you a car this late in the day.
A garage may also have a similar issue regarding the finance paperwork and again they may simply not be able to get the deal done in the required time. If a car has to be delivered for them to be able to count it as sold another stumbling block might be the car you’ve chosen may not be ready or able to be delivered that day. Most garages now have strict requirements that need to be met before a car can be handed-over.
Another and more import issue may be that they don’t have a car that you actually want. All these issues can get in the way of you getting a good deal and the garage hitting target.
So how do you time it right?
Luckily that’s easy. You let the garage do the chasing and just wait for them to call you.
But how do you do that?
You achieve this by shopping for a car at the start of the quarter ending month. You chat to and build up a relationship with a sales executive or manager and take your time to figure out which car you want and what price you want to pay for it. You do your homework and understand how much your part exchange is worth and get to the point that you are ready to buy a car.
The sales team now knows you and has appraised your part exchange and you have been approved for finance. Everything is in place and all you have to do is say yes and buy the car. But instead you stall the deal and simply say you want to think about it and that you’ll get back to them.
If you’ve ever given your details to a salesperson at a garage you know you will receive a follow up call in the next few days. You should be super polite when the call comes and explain that you really like the car but you just aren’t ready to commit yet.
The salesman will no doubt be disappointed but he will follow you up again in the next few days. This is where you say you are still interested but you need to see an improvement in the numbers. The sales executive will then try to find a way to get you to do a deal. This may include an improved finance rate, increase on the part exchange price, discount on you new car or they may give you an extended warranty or free paint protection etc.
By this point the deal may even start to look very appealing and you might even think you should take it. But its still worth waiting and again saying you still need some time to mull it over.
You are playing a waiting game here. But in most cases you will still receive follow up calls over the next few weeks or days. The idea now is to wait until closer to the end of the month, when hopefully you will get a phone call with an even better offer. This offer will be driven by the fact that the salesman or garage has yet to meet its volume bonus or is trying to squeeze in a last few deals for the year if you’ve stated car shopping in December. It is at this point you will learn if you can get a better deal or whether the garage has given all it wants or can. You can then push for a better deal. If one isn’t forthcoming then you can decide if you want to deal or walkaway.
If you don’t get a follow up call you can simply call the dealer towards the end of the month and ask if there is anyway you can get a better deal if you proceed with the sale today. The sales executive may just have forgotten about you or simply thought you had moved on or bought elsewhere, so you following up isn’t a bad thing at this point. He could of course already have met or exceeded his targets, meaning you aren’t necessarily going to get a better deal. But if you had done a good job in negotiating the original deal and are happy with the finance rate, part exchange price and most importantly the car, you can simply except the previous deal and proceed with the purchase. But in most cases there will be some further movement.
What if I can’t wait until then?
If you can’t wait until the end of a quarter then towards the end of a month is the second best option. This is a good time to negotiate a deal for largely the same reasons stated above. Sales managers and especially sales executives will be keen to finish the month on a high and make additional commissions. You may not get as good a deal but you should get a better deal than at any other time of the month. But again don’t leave it until the last day if you can help it.
What about October, November and December?
October, November and December are better than other month again for the reasons already stated. But also because traditionally these are the quieter months of the year in the motor trade. So the supply and demand factors shift in favour of the buyers, meaning you will get better deals.
If you are looking at buying a used or preregistration car book values tend to drop around this time of the year so dealers may be looking to shift certain cars, and will be offering significant discounts.
Buying a car out of season
Seasonality plays a big part in the value of specific car types. Needless to say it’s hard to get a great deal on a convertible in the spring. But you can negotiate hard if you are buying in the winter or late summer. The buying times obviously reverse if you’re looking at a 4×4. So shopping out of season for your dream car can save you a small fortune.
Holiday sales
Most franchised dealers will hold sales on the major holidays each year, they may also hold them during major sporting events. If you look carefully you can actually find some good offers. But you do need to shop carefully as some dealers just use these promotion so get more footfall and rarely offer and true discounts.
Conclusion
Buying a car at the end of quarter can work really well and I have seen the strategy used by both by the general public and businesses on numerous occasions and in some cases to great effect. But if you can’t wait until then you can use the same strategy in the week before months end. Out of season buying is also a strategy and some holiday sales do offer up the occasional bargain.
But these tactics don’t always work and I can’t guarantee you will get the best deal. But it will give the best chance and advantage, especially if the garage or sales executive needs to achieve target. So shop late in the year or late in the month to get the best deals.
