The end of the calendar year is typically a great time to buy a new car.
Holiday car deals can yield big discounts due to a combination of special manufacturer incentives, bonuses for sales people, and dealers wanting to make annual sales quotas and get rid of old inventory. So, the end of the year is the best time to buy a new car – right?
Ah, but this is 2020, where nothing is “normal.” While the 2020 holiday season will still be a good time to buy a new car, it will be different from previous years, thanks to good ol’ COVID-19.
I’m LeeAnn Shattuck, and I’m skilled at finding the perfect car for my clients based on their needs, financial situation and priorities. Lucky for you, I’m here to answer your questions, too—and to help you find the best deal while holiday car shopping.
The global pandemic has had a significant impact on the retail automotive industry. Most dealers are still suffering from the inventory shortages created by the shutdown of the various automotive manufacturing plants earlier in the year. Used car inventory also slowed down, as many people opted to extend or buy out their leases during the lockdowns.
Yet, June and July saw record sales across the country due to strong financing incentives and a whole lot of pent-up demand, as many consumers redirected their vacation budgets towards the purchase a new car. By August, both new and used car inventory levels were at record lows, with some popular models disappearing from lots altogether. New car sales dropped by 20-25%. Demand was still high, but the dealers had little left to sell, as manufacturers focused on changing over production to the 2021 model year. Inventory levels are finally starting to make a comeback, but most plants are still not operating at 100% capacity in an effort to keep their workers safe.
We have an unusual combination of economic factors going into the holiday car shopping season this year. Dealers desperately need to makes sales, yet most still have a limited amount of inventory on their lots. So, how will this affect the end-of-year deals? Holiday incentives will still happen for 2020, but may not be quite as juicy as in previous years. Don’t expect fire sales, especially on popular makes/models. Most of the incentives will focus on low or zero interest rates and attractive lease deals, versus cash rebates.
Your Foolproof Strategy to Buying a Car by Year’s End
Begin researching the makes and models that interest you to determine if those models are readily available on dealer lots or if inventory is scarce. Find out if more inventory is on the way, of if you need to jump on a vehicle before they sell out.
It’s important to know that many of the “holiday” incentives have already been released by the manufacturers and will run through January 3rd, 2021. That means you can start getting those deals right now. You may find a better deal and more choices if you make your purchase in November rather than waiting until the end of the year. Especially if you are shopping for a leftover 2020 model.
Don’t just pay the price on the red tag.
That “special holiday sale price” advertised on the big red tag hanging from the side view mirror may not be best deal available. Even if inventory levels for your preferred model are low, the dealers are still hungry for the sale to make their year-end quotas. If you don’t do your homework and aggressively negotiate, you may end up leaving money on table. Research deals and incentives, and see if you belong to any organizations that could see you eligible for discounts. Students, veterans, medical professionals, and more could be eligible for a tidy discount.
Push for more money for your trade.
Dealers still need used cars for their lots. If you have a nice vehicle to trade, be sure to negotiate a strong selling price. If you are turning in a leased car, and you are under your allowed mileage, you may have equity in the vehicle that can be applied towards your new purchase or lease.
Look at the special financing options.
Most manufacturers will offer low interest rates on new cars, but some captive finance companies also have special rates for Certified used cars! Lexus, for example, is currently offering 0% for 60 months on all new models and 1.9% on Certified pre-owned models. Make sure you’ve researched all the options if you’re in the market for a used car to ensure you’ll get the best deal.
Shop safely from home!
Dealers have increased their online sales this year due to the pandemic, so take advantage of their new, virtual shopping process. Sure, you can probably negotiate more aggressively in person, but with the rapidly increasing COVID-19 rates, is it worth the risk to hang out in a dealership all day with dozens of other holiday car shoppers? I have been doing all of my negotiating online and on the phone for nearly 20 years, so trust me – you can get a good deal in the comfort and safety of your own home. Just be aware that it may take the dealers longer to respond to emails and messages during the busy holiday season. That’s another good reason to start shopping now!
Here are some of the best holiday deals currently available:
If you are looking for a deal on a leftover 2020 model, Toyota has 2020 Camry and Avalons still available. Honda has Accords, Civics, CRVs and HRVs still on the lots. Ford and Chevy still have some 2020 pickup trucks, commercial trucks and cargo vans for business owners looking to purchase new vehicle for their fleets before year end.
Chevrolet is offering strong rebates on leftover Trax and Equinox SUVs, while Nissan has deep discounts on Pathfinders and Armadas. Kia has big rebates, 0% APRs, and killer lease deals on the Cadenza sedans and Sorento SUVs, while Hyundai has similar finance deals on new 2021 models, including the popular Kona. On the luxury front, Acura has leftover 2020 MDXs on special, and Volvo has strong incentives on the new 2021 XC90s.
Waiting until the very end of the year can be a smart strategy for getting a great deal on a new car. But the unusual market for 2020 also makes it a risky strategy. You may have to settle for a different color or for a vehicle with fewer (or more) options than you really want. Or you could end up with a lump of coal in your stocking because the car you want is completely sold out until after the new year.
Some great incentives are available now. If you want to buy a new car, this is the time to start digging.