Easy methods to discover a good year-end deal if you find yourself out there for a brand new automobile

Ty Wright | Bloomberg | Getty Images

For car buyers, the end of the year is usually the best time to get a lot.

This time it looks a little different. While discounts and special financing are still available for certain brands and models, experts say these incentives are generally not as generous as they were last December.

“It’s not a buyer’s market, but discounts still exist,” said Ivan Drury, senior manager, Insights at Edmunds.com. “Are they as widespread as they were? Sure not.”

Due to a coincidence of factors – including inventory from factory shutdowns in the early pandemic and unexpected demand from domestic consumers looking to take to the streets – discounts this month are not as high as usual.

Basically, dealers don’t need to exert as much pressure to remove cars from their parking spaces. The average sell time for new inventory – 2020 and 2021 models – is 50 days.

“It used to be 60 to 70 days,” said Drury.

It’s not a buyer’s market, but discounts are still available.

Ivan Drury

Senior Manager for Insights at Edmunds.com

In addition, it has been common for the past few years for sticker prices to average 10% or more, with occasional drops below that threshold, said Kelsey Mays, executive editor for consumer affairs at Cars.com.

“Now we’re under 10% for the fourth month in a row,” said Mays.

The average amount paid for a new vehicle is now more than $ 38,000. That’s a record $ 37,100 last month. That comes from a forecast released last week by JD Power and LMC Automotive. Much of this is due to the shift in consumer demand to larger vehicles like SUVs and trucks instead of smaller cars, as well as improved technology and safety features.

And while the used car market saw a spike in demand this year that drove up prices (as well as trade-in values), that seems to have cooled down a bit as some buyers have found a cheaper one to be New car is not a new one. Not much more used than some more expensive ones, say experts. As of October, used car buyers paid an average of $ 24,000 for a 3 year old model.

Other used car buyers may be waiting for 2021.

“Usually people prefer to wait for the next calendar year to change because the model year is a year older,” said Drury.

Where the offers are

In general, you will likely find a bigger discount on models for the current year. Across all categories – from large SUVs and trucks to small cars – the average discount for 2020 vehicles is over $ 5,000, according to Edmunds data. For 2021 models, that number is under $ 3,700.

Some brands may also offer larger discounts on certain 2020 models due to larger sales. In the Cars.com database, a total of 34% of the vehicles are this year’s models. However, it is more than 72% for Ford and 61% for Nissan.

“These are two very popular brands with a slew of 2020 models that consumers could get pretty heavy discounts on,” Mays said.

For example, the 2020 Ford EcoSport, which starts at around $ 20,000, offers a manufacturer discount of $ 3,250 to $ 6,750, depending on vehicle equipment and where you live, according to Cars.com. A discount of up to US $ 4,500 is now possible on the Nissan 2020 Pathfinder.

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Also, be aware that buyers with good credit scores may qualify for (or near) 0% financing on certain cars. However, if there is a discount on the car you are looking at, you may have to choose between this offer and cheap financing.

“Most consumers have to weigh up whether they want the money back or the 0%,” said Drury. “Sometimes you can get both.”

Other cost considerations

It is known that new cars depreciate fairly quickly after purchase and continue to depreciate over time.

So if you are thinking about a longer loan, i.e. 72 or 84 months, you should be aware that it can take longer to get to a point where you no longer owe the car more than it is worth. That said, if you’ve passed the point of what’s called negative equity, it’s also known as upside down.

While it depends on the type of car and the specifics of your transaction – how much you’re funding, the interest rate, how many years you’ll be paying – negative equity can make it difficult to sell the car for at least what you owe on it or at least to exchange it without converting the remaining balance into a new loan.

Ask yourself if you will still like the car in three, four or five years.

“The commitment is longer not only when you’ve extended the loan terms, but also when you hit the break-even point where you’re not upside down,” said Matt Jones, director of industry education at TrueCar.

“Make sure it’s the right car not just for now but for the future,” said Jones.

In addition, it is worth checking how the new car will affect your insurance. Depending on the make and model (as well as factors such as where you live, how you drive, and your claims history), your insurance premiums may increase.

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