The Best Time of Year to Buy a New VehicleDec 3rd, 2015
It’s a major decision to buy a vehicle no matter who you are. Your buying decision may be forced upon you, like if you have an accident that writes your vehicle off or if your car needs a major repair that just isn’t worth the cost. Others may be the planning type; those who consistently replace their vehicles every couple of years regardless of its condition.
If you’re one of the latter group or someone with the luxury of time in making a vehicle purchasing decision, you’ve considered what time of year is best to buy a new vehicle. The answer isn’t as clear as you might think.
There are several factors to keep in mind as you try to determine the right time of year to buy our new vehicle.
1. Your prospective purchase’s model cycle. The newest model year on many vehicles is released in the fall like the Civic, Accord, and bestselling Honda CR-V, though that’s not always the case. Every so often, a new model year – or even a brand new model or redesign – will be released in the spring. Take the HR-V and the Fit for instance; both were released in the springtime. For the most part, the best interest rates, rebates, and bonus offers are available at the end of the model year. Even better yet is when the outgoing model year overlaps with the incoming model year. The drawback to waiting until the end of the model year is that the availability of colours, option packages, and even entire models will be extremely limited or even sold out.
2. Major shopping sales events. Car sales follow the cultural trends as much as holidays, special events, and seasonal changes. While the best interest rates and deals are often found at a model year clear-out, incredible deals can also be found coinciding with Christmas shopping, truck sales can be found right before winter, sports car deals are typically late spring and summer, and so on.
3. Lease rates and residuals. If you’re considering leasing your next vehicle, there are even more factors to consider. Along with negotiating the best deal, your lease rate and residual value at the end of your lease term come into play. Residual values and interest rates slowly decrease over the course of the model year. What you need to keep in mind is that a low residual value at the end of your lease is great if you plan on buying it out, yet it may not play a role in your decision to lease if you don’t plan on keeping it once your lease term is through. Striking a balance is important if you aren’t sure you are buying it out or giving it back. A misconception is that the lease payment may be lower later on in the year. That may not actually be the case because, though the interest rate is lower, you’re paying off more of your car over the lease term because of a lower residual rate. Often, throughout the model year, there are compelling interest rates for leases to be had if you keep an eye out.
4. Your trade-in. There are a couple things to keep in mind with your trade. First, you want to buy something new before your current vehicle requires too many repairs. One of the most common trends buyers get caught in is waiting too long to buy a new vehicle, and putting the money they’ve designated for a new vehicle into repairs for their old, deteriorating one instead.
Second, it’s best to buy before your vehicle is another model year older. Every time a new model year comes out and your vehicle adds another year to its age, its value decreases significantly. It’s a tightrope walk trying to strike a balance sometimes, though if you can, it’s quite rewarding.
5. Your financial calendar. Often the decision to buy a vehicle is best left to when it is a good time for YOU. While certain times of year are a little better than others, the marketplace for new vehicle sales is always hot. Car manufacturers always want to keep their vehicles rolling out the door and will have incentives running to make sure of it, so no matter when you’re ready to buy, you’ll be able to find a good deal.
To sum it up, you’ll find a great deal on your new vehicle at the end of a model year when they are being cleared out. The deals are even better yet if the clear-out is before a re-designed model is being released or it’s the final year of a model. Just don’t wait too long or your selection may be limited.