While Americans bought 1.65 million motor vehicles in December of 2020, the remaining 11 months of the same year saw only 1.75 million new car owners.
What December has against other months? Is it worth buying a car in December? Let’s find out.
Is it Worth to Buy a Car in December?
December is by far the best time of the year to buy cars. It offers the best deals and discounts. With all dealerships trying to make way for the new models, buyers have all the leverage.
4 Reasons Why Buying Car in December might be a Good Idea
Why out of all the months of the year, do people purchase vehicles in December? And does this carry any benefits or not? Let’s try and find out the answers to these queries!
1. Best Discount Offers
Edmunds data show that December is undoubtedly the best time of the year to buy a car. Data shows that car manufacturers offer an average discount of 6.1% on retails prices in December. This is higher as compared to any other month.
December is Christmas month. Most companies disburse bonuses to their employees around this time of the year. Car dealerships are looking to capitalize on this opportunity by offering them the best deals. They create the best custom offers and discounts.
Due to Christmas, December is buying season for everyone. People are purchasing all sorts of items. Hence, for car dealers to grab your attention, their offer must outshine all other offers in the market. This ensures that you get the best possible rates.
2. Time to Clear Inventory!
Car dealerships are looking forward to clear their inventories in December. This way they can make space for newer models. Car dealerships view lingering on sales as a potential loss of opportunity. As they can enjoy higher profit rates on new cars, as opposed to old ones.
For dealerships in the United States and some other parts of the world, December is an even more testing time. As government imposes an inventory tax on all unsold inventory. Companies are looking forward to save that money by clearing their unsold inventories.
Clearing the inventory of discontinued models is also a serious worry for car sellers. Once a model is discontinued, selling its units becomes a difficult task. So, car sellers offer huge discounts on these models. The result is lower car rates in December.
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3. Quarter End
The quarter-end months are:
Around these quarter closures, all companies are looking forward to increase their sales. Every sale they make increases a shining star to their quarterly sales review. That’s exactly why car dealerships play smart just before the quarter ends. They use every tactic in marketing book and lure you into making a purchase.
Salesperson will find every opportunity they can, to call you in Decembers. As they’re under immense pressure to make sales.
These quarter ends are even more desperate times for salespeople. Since, number of sales they make in a quarter, directly decides the amount of their bonus. Hence, the salespeople will minimize their commission and offer you the best rates. He will be looking to get that bonus of his, rather than trying to earn a hefty commission on the sale.
December is even better than any other quarter ends. Because not only it is the quarter end, but this is also the year-end. The desperation of a salesperson to make every single sale is at its peak.
Not only salespeople are competing to get better of each other. Also, the auto manufacturers are looking to close their quarters on a high.
The end of the year also marks the start of a competition between automakers. They compete to determine which was best seller sedan last year, the best seller hatchback and SUV? And which car received the most positive reviews from buyers, last year. In this race, they exert pressure on dealerships to make more and more sales. So that they can boast about them.
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4. The Technical Reason
Most car owners will also agree that winter is the toughest time for a car. According to car mechanics, winter is the best time to test your car as well. If you buy a car in December, you’ll have a long winter ahead. So, if there is some technical problem with the car, it will be highlighted in no time. If your car is in warranty, you can enjoy free maintenance as well.
If you’re looking forward to replace your old car, the start of winter is the best time to do so. Car breakdowns increase by 25% in cold weather. Any unexpected car problem can ruin your Christmas. So, December is a good time to replace your old cars as well.
3 Reasons Why You Should Also Consider Buying Car in January
1. Extended Discount Offers
The topmost reason to buy a car in December is due to the enormous discounts this month has to offer. Don’t worry, if you missed out on the opportunity to get a hold of your favorite car in December. As most of the car dealerships and auto manufacturers extend their discount offers into early January.
The last weeks of December are holidays in most parts of the world. To make up for that lost time, companies prolong their sales offers. So, you can still seal the best deal for yourself.
2. New Model Effect
Waiting for just one more month will change the model year of your car. For example, if you bought a car in December 2020, it was a 2020 car. However, if you bought it just one month later in January 2021, it will be “The brand new 2021 car”.
But the real benefit will be while reselling the car. A car bought in December 2020 will be called a 2-year-old car. On the other hand, a car purchased in January 2021, would only be a year old. See the difference created by one month only!
But this reselling reason is only valid if you sell your car within two to three years of buying it. If you’re planning on using it for five years or more, then it will have no significance at all. Because 7 years old or 8 or 9, who cares. That’s just another old car. Whose condition will determine its value. Not the year of manufacturing.
3. More Options
At the end of the year, most of the inventory is already sold. You’re out of options and might have to compromise on certain aspects of a car. If you’re looking for that special color. Chances are it is already sold out.
Similarly, different variants of different cars have certain features to offer. Say that you want variant of a car with retractable side mirrors. The likelihood of finding it in December is lesser, as compared to other times of the year.
Buying in December means you have lesser options to choose from.
When is the Worst Time of the Year to Buy a Car?
According to Edmunds data, the following are the worst months of the year to buy a car:
- January (Late January)
There is a common reason for January to April being the worst months to purchase cars. These are the slowest-selling months of the year.
With auto manufacturers waiting for the start of spring to launch their brand new models. The outgoings models are the only viable options left in the market. So, it is highly unlikely that you find a good deal. In the absence of new cars, there is hardly any competition left for older ones.
The story of march and April is different. Companies roll out advertisements for their new cars. Everyone starts talking about its smart features, comfortable ride, and unmatched mileage. This catches many of us in a haste to buy that newly arrived car. With everybody looking to buy, rates of the cars skyrocket.
Therefore, always avoid buying cars in these months!
The Final Advice on When to Buy a Car?
So, is it worth buying a car in December?
Well, I’ve listed down almost every argument, to help you make up your mind. In my opinion, the answer to this question is yes.
You should definitely buy a car in December because in most cases, you will find the best deals. There is pressure from dealerships who need to sell cars to make way for new models.
People are arguing about trend changes in post-COVID situation. But statistics show strong evidence that December is still the best month of the year to buy a car.
Bonus tip: If you’re wondering what time in December is best for making a purchase. Then push till the end of the month to maximize benefits. Try to purchase on a Monday or Tuesday. These days offer the best discount rates.
To sum it up, you have worked hard all year long. Probably you’ve worked long hours and extended your weekends to make it all count in the end.
You deserve to treat yourself and finish the year on a higher note. So, go ahead and get the car of your dreams.