There are many variables when it comes to the best time to buy a new set of wheels. I get this question on my radio show a lot, as people often wonder what the best time to buy is. Years ago that was an easy answer – today it is almost impossible. I try to alert my listeners when I feel the conditions for purchasing are better than usual. As I write this in mid-June 2015, I see some signs that could have an effect on the final price you can get.
Rebates and factory incentives ebb and flow all the time. We know that around holidays the rebates go up, at the end of the month is another time, and when the end of the month falls at the same time as the end of one of the four quarters of the year (March, June, September, and December) it is a particularly good time. The week between Christmas and New Years Day has been a great time to buy since I was a wet- behind-the-ears car salesperson over 35 years ago.
With that said, the price of a new vehicle is not the only consideration. If you have a trade-in, what is going on with the used car market can have a major impact on your bottom line, or as we say in the car biz, the drive-out price. The used car market has been sky high the past few years, but indications are prices will fall due to record numbers of people buying new cars. May of 2015 was the best new vehicle May in history. That produced a flood of used cars on the market, and that will cause prices to fall.
We also know that every August, usually after mid-month, used car prices begin to fall. The newer the car, the more the price falls. No matter when you purchased your car, every car becomes a year older at the same time. Today, a 2012 is a three-year-old car, in late August that same car will be four-years-old and will drop in value. If you have a trade-in, waiting until September could cost you thousands.
There are other factors, too, that affect new car prices. For instance, gasoline prices have jumped up over fifty-cents per gallon since the first of March 2015. Already I am seeing demand for hybrid and electric cars going up. If gas continues to rise in price, the price of hybrids and electrics will go up, and any factory incentives will go down. If you are thinking of one of these vehicles, you could miss this window of opportunity to get a bargain by waiting.
The other interesting trend is for the first time in a number of years, diesel fuel prices are now lower than regular fuel. In the Texas markets, diesel is about the same price, slightly lower than regular in some places, but in Los Angeles diesel fuel is almost 50 cents per gallon less. Some people that wanted or needed a diesel shied away from them because of the cost of fuel. I suspect that those people will come out of the woodwork now, and that will cause diesel cars, trucks, and SUV prices to rise-and that will be true for both new and used diesels.
Learning trends of the auto industry, and paying attention to the variables like time of year, fuel prices, interest rates, and used car value if you have a trade-in, will save you money.