Buying a car is an expensive undertaking. In December 2023, the average transaction price (ATP) of a new car in the United States was $48,759. The average used car price was about $26,000. That doesn’t include interest and fees on dealer financing or a personal loan to buy a car. Car buyers need to find ways to offset these costs. One of those is knowing the best time to buy.
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Timing Factors for Car Purchases
Anecdotal evidence suggests that Mondays are the best time to buy a car, but it’s not always true. The proven timing factors that affect car purchases are as follows:
- Seasonal demand
- End-of-year discounts
- New model releases
- Dealership sales events
- Personal finances
Auto industry market data shows that car sales peak in the spring and fall when more people are shopping for a new vehicle. At the end of the year, salespeople and dealerships are looking to make year-end bonuses and sales quotas. That causes prices to come down, providing better deals for car buyers.
New model cars start coming out in the fall, so dealerships often have clearance sales over the summer months to clear space. That’s been less common in 2023 due to supply chain problems stemming from the pandemic. You can keep an eye out for dealer sales events and advertisements for lower APRs. A combination of the two could add up to significant savings.
Personal finances are the one aspect of timing that’s often overlooked. The best time to buy a car is when you can afford one. It’s also best to wait until your credit score is as high as you can get it. Pay off debts like credit cards and personal loans before you buy a car. That could help increase your credit score, which may help you get loan offers with better interest rates and other terms.
The Wrong Time to Buy a Car
The worst time to buy a car is when you’re desperate. In many cases, buyers find themselves agreeing to less than attractive terms when a car is a “must-have.” A better approach is to shop around and compare sticker prices and financing options. You can do that if your current vehicle is still in decent shape. Waiting until it breaks down will leave you without transportation and desperately needing something new.
Another factor to consider here is your credit score. Buying a car with a lower credit score will be more expensive. That’s true whether you’re in the market for dealer financing or taking out a bank or credit union loan. Some online lenders might be able to offer loans for those with less-than-perfect credit, but improving your credit score will still get you a better deal.
The Bottom Line
The time factors that affect car purchases are seasonal demand, end-of-year discounts, new model releases, dealership sales events, and personal finances. The day of the week or month isn’t as impactful as you might think. The wrong time to buy a car is when you’re desperate. Take your time, shop around, and improve your credit score before car shopping.
Notice: Information provided in this article is for information purposes only and does not necessarily reflect the views of entrepreneurshiplife.com or its employees. Please be sure to consult your financial advisor about your financial circumstances and options. This site may receive compensation from advertisers for links to third-party websites.
