One hot priority for Americans in 2023 is purchasing a car. GOBankingRates surveyed 1,028 Americans to find out which major milestone they want to reach in 2023, and 40% said they plan to buy cars.
Due to the strained economy, 18% of respondents said they put off car purchases in 2022.
Whether you plan on buying a new or used car this year, you’ll want to make sure you’re going into the process with the best possible strategy. Use these tips to ensure you get the best deal on the vehicle of your choice.
Know the Best Time To Buy a Car
Timing is everything when it comes to purchasing a car. Shopping for a car can often be timed down to a specific season, holiday or month to receive the best deals.
If you’re shopping for a new car, Edmunds recommends penciling in these key dates in 2023:
October, November and December
Yes, the most discounted months for buying a new car are the final three months of the calendar year.
While prices do get better as summer approaches, thanks to the introduction of new cars, data from Edmunds shows the best time to buy is in December. This month has the highest discount off the manufacturer’s suggested retail price (MSRP) and dealerships are hard at work closing the year with big sales as they work to get rid of old inventory.
We often see three-day weekends billed as some of the best times of the year to get a good deal on a new car. Edmunds rated each three-day weekend in 2023 to see which weekends have the best deals for buyers:
- Memorial Day. This is ideal for shoppers looking for certain car colors or option packages.
- Fourth of July. Use this time to determine whether you want to shop for a car from the outgoing year or incoming year.
- Labor Day. A “holiday sweet spot,” Edmunds reports, for viewing a wide selection of vehicles and competitive pricing. (It should be noted the savings will still be much stronger in the final three months of the year.)
What if you’re shopping for a used car? The best timeline for buying a used car also is October, November and December. According to Edmunds, as new cars enter their peak buying season, more trade-ins come into the used car inventory. Car shoppers have a wider variety of used cars to choose from and at better prices than if they had shopped in the spring months.
Learn Everything You Can About Pricing
According to Kelley Blue Book, there are three types of vehicle pricing:
- Invoice Price. This is the dealer’s cost for the vehicle. This does not include the dealer’s costs for advertising or financing the vehicle. It is possible to use the invoice price as part of your negotiation since dealers make the most money on used cars, parts and services.
- MSRP. The manufacturer’s suggested retail price is a suggested sticker price for the car. It must be displayed on every new vehicle in the United States, by law. However, it’s not always the highest market price. Exceptions to the rule can include certain types of vehicles in high demand.
- Fair Purchase Price Range. This is a vehicle pricing tool developed by Kelley Blue Book. It is updated every week using purchase data collected across the United States.
The more you know about what people paid for their cars, the better you’ll be able to determine how much you’re comfortable spending and where there may be room for negotiation.
Learning as much as you are able about pricing ultimately ensures you don’t put yourself into debt and that you stay within your budget. The general recommendation, according to Kelley Blue Book, is that your car should cost no more than 10% of your annual take-home pay.
See the Used Car’s Price Before Negotiation
If a new car is out of your budget, a used car may be within your price range. As with a new car, you will need to set a budget for how much you can afford. Then, you will need to figure out how you plan to finance the purchase, which may be done by taking out a loan or by using a cashier’s check, and how you will pay for recurring car costs such as gas, auto insurance, registration and repairs.
What about negotiating the price of a used car? Kelley Blue Book recommends you review the used car’s price, plus fees and taxes. Then, share with the dealer more about your plans for financing the car; the dealership will be more likely to meet your demands.
Ask For the ‘Out-the-Door Price’
What’s an out-the-door price? Edmunds said buyers who would rather pay cash and not have to discuss monthly payments and interest rates with dealers and financers can ask for out-the-door prices. These are the total cash prices, including any additional fees from dealerships.
Don’t Shop in a Hurry
It’s not a good idea to go to a car dealership unprepared or with the intention to make a purchase in a hurry or on the spot. You might wind up overspending on a car that does not meet your lifestyle or lacks the features you desire.
Consider Buying a Car Online
While you do want to go to the dealership to examine the car and take it on a test drive, you are not limited to buying the car in person. You may decide to make the purchase through the dealer’s or manufacturer’s website.
How does making an online purchase equal receiving a deal? According to Kelley Blue Book, some manufacturers offer promotional offers or loyalty programs to customers who register directly through their websites. Some may include 0% down, customer cash and low finance rates.
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