The end of the year can be a great time to get a killer deal on a new car.
Holiday incentives from the manufacturers in the form of rebates, low APRs, and lease deals can help keep hundreds to thousands of dollars in your pocket during end of year car shopping. The dealers are motivated to move any leftover inventory from the previous model year and to meet their yearly sales goals. The number of vehicles they sell this year determines their vehicle allocations, marketing dollars and other financial benefits from the manufacturer they get next year.
Of course, this is 2020, so the year end car market is a bit different than previous years. Dealers have posted record sales, and inventory levels are still not back up to normal levels due to the restrictions the pandemic has placed on automobile production worldwide.
Only a handful of leftover 2020 models remain on lots, and many 2021 models are in high demand, like the fully redesigned 2021 Chevrolet Tahoe and the ever-popular Kia Telluride.
German dealer are especially tight on inventory, so don’t expect great deals from Audi, BMW or Mercedes this year. The Japanese and Korean brands have more inventory, but expect their incentives to be on the financing side rather than cash rebates. The deepest discounts will come from the American manufacturers who have the most leftover 2020 inventory.
Most plentiful leftover 2020 models:
- Economy cars: Chevrolet Spark, Mitsubishi Mirage, Nissan Versa
- Small vehicles: Honda Fit, Chevy Trax, Kia Soul
- Green vehicles: Chevy Bolt EV, Hyundai Ioniq Hybrid
- Sedans: Chevy Malibu, Cadillac CT5, Honda Civic, Hyundai Elantra, Nissan Sentra, Nissan Altima, VW Jetta, VW Arteon
- Crossovers: Ford Edge, Honda CR-V, Hyundai Tucson, Hyundai Santa Fe, Mazda CX-5, Nissan Rogue, VW Tiguan, Jeep Grand Cherokee
- SUVs: Chevy Equinox, Chevy Traverse, GMC Terrain, Nissan Murano, Nissan Pathfinder
- Luxury sedans: Acura ILX, Lincoln Continental
- Luxury SUVs: Acura MDX, Alfa Romeo Stelvio, Buick Encore, Buick Enclave, Cadillac XT4, Infiniti QX60, Lincoln Aviator, Lincoln Nautilus
- Trucks: Chevy Silverado, Ford Ranger, Ford F-150, RAM 1500, Nissan Frontier, Jeep Gladiator
- Muscle Cars: Dodge Challenger, Ford Mustang
What to expect from end of year car shopping
I strongly encourage people to start their car shopping early to avoid the last minute, year-end craziness at the dealerships. But time has a way of flying by, especially during the holidays, and many people find themselves shopping for a car the week between Christmas and New Years. Here’s what you can expect if you want to buy a car at the very end of the year:
- You may have to settle for whatever vehicles are on the lot. Normally, if your local dealer doesn’t have the car you want in stock, they can find it for you by checking the inventory that is in transit from the factory or by trading with another dealer. At the end of the year, however, dealers may too busy and too protective of their limited inventory to get you exactly what you want. You may have to be flexible on options or colors to get a deal done by year’s end.
- You may have to negotiate the deal in person. It is easier than ever to buy a car online, but you may not have time if you wait until the last few days of the year to begin your shopping. Due to the sheer volume of prospective customers, dealers are much slower to respond to phone calls and emails at the end of the year. Most dealers prioritize customers who are physically in front of them over those who prefer to negotiate remotely.
- Be prepared to spend a long time at the dealership. December is traditionally the busiest month for car dealerships. With record sales this year, most showrooms resemble a three ring circus with each sales person juggling multiple customers at a time. Expect to spend several hours at the dealership to get a deal closed, with much of that time spent waiting. And waiting. Bring a book. Or two.
Whether paying cash, financing or leasing, begin by negotiating the selling price of the car. Most dealers want to focus on monthly payments at the negotiating table. That sales tactic allows them to easily hide their profits, while making it appear they are giving you a good deal.
When end of year car shopping, force them to talk about the selling price of the car, so you can see the true cash discounts. Ask to see an “out-the-door” numbers breakdown, including taxes, DMV fees and any dealer fees. This is where you will find any hidden fees or dealer add-ons, like “appearance” or “protection” packages, that they try to sneak into the deal to increase their profits.
While government fees, like taxes, tag and title fees, are not negotiable, dealer fees and added accessories can be deducted from the selling price of the car.
If you plan to lease the vehicle, don’t just take the advertised lease deal. While the residual, money factor and acquisition fees are not negotiable, the selling price of the car is. The lower the negotiated selling price, the lower your monthly lease payment.
Cash rebates are often different depending on whether you are leasing or purchasing a vehicle, so be sure to research the incentives that apply to your specific situation.
Best December New Car Incentives
Despite record sales this year, most manufacturers have good incentives through the end of December (or through January 4 in some cases) on remaining inventory. End of year car shopping incentives vary by geography, so be sure to check the offers available for your zip code. Many manufacturers offer additional rebates for military and first responders.
- Acura: Good lease deals or 0.9%-1.9% APR on most models.
- Chrysler: Up to $6,500 cash allowance on 2020 Pacifica or 0% for 72 months.
- Dodge: Up to $3,000 in cash rebates (and $1,000 in dealer cash) on most 2020 models; 0% APR for 72 months on 2020 Durango R/T.
- Ford: As much as $10,000 total savings on 2020 F-150s, 0% APR for 72 months on most 2020 models.
- GM (Chevrolet, GMC, Buick, Cadillac): Employee pricing for everyone on leftover 2020 models and some 2021 models, which can mean as much as $10,000 off MSRP.
- Honda: Good lease deals on most models; 0.9% for 60 months or 1.9% for 72 months on 2020 models; 1.9% for 48 months or 2.9% for up to 72 months on 2021 models.
- Hyundai: Good lease deals or 0% up to 72 months on most 2020 and 2021 models.
- Infiniti: 0% APR up to 72 months on all 2020 models.
- Jeep: Employee pricing for all on many 2020 and 2021 models.
- Kia: Good lease deals or 0% APR up to 75 months on many models.
- Lexus: Good lease deals on 2021 NX 300 and RX 350 as well as leftover 2020 ES350 models.
- Mazda: 0.9% up to 60 months on all 2021 models.
- Mercedes: Good lease deals on 2020 GLC 300 and 2021 GLA 250 models.
- Nissan: As much as $3,000 in rebates or 0% APR up to 72 months on most 2020 models.
- Subaru: 0% APR up to 63 months on most 2020 and 1.9% APR on 2021 models.
- Toyota: Good lease deals on RAV4s, Highlanders and 4Runners.
- Volkswagen: Good lease deals on 2020 Jetta, Tiguan and Atlas Cross Sport models and the 2021 Atlas.
- Volvo: 0% APR up to 60 months on most models.