Waiting until December to buy a new car or truck? Forget it. The best deals can really be found in August, according to TrueCar (TRUE).
Car shoppers have long thought of December as the best time to purchase a new vehicle. But a report from TrueCar revealed that transaction prices average $29,296 in August, $1,850 lower than December.
TrueCar, which connects buyers and sellers through its website, also said the first two days of every month tend to provide the best prices. Consumers have traditionally shopped for cars at the end of the month in hopes that dealers are scrambling to meet sales quotas.
“I like to say that TrueCar data will set you free,” TrueCar president John Krafcik said.
August buyers benefit from the changeover in model years, as older cars typically come with generous incentives. July is also a good month for car buyers. Transaction prices are just $169 higher than August.
The change in model years used to come in September and October, Krafcik noted. Most automakers now launch vehicles earlier. This year, TrueCar sees 2015 models hitting showrooms even quicker than usual.
Krafcik provided the 2014 Toyota Camry as an example of a good buy this summer. The 2015 version of Toyota’s (TM) mid-size sedan is getting a redesign.
Although dealer inventories are filled with next year’s cars by December, the end of the year remains a good time to take one off the lot. “Both are huge sales months,” Krafcik said.
Buyers should also keep in mind that some types of vehicles buck the trend. For instance, TrueCar found that transaction prices for pickup trucks hit their lowest point in February. Businesses are motivated by tax deductions to buy new trucks before year’s end. Krafcik said dealers typically have fewer truck customers in January and February, meaning prices for consumers tend to decline.
Early Bird Special
The final days of each month are often busy for auto dealers, which is exactly why car shoppers can get a bigger break when the calendar turns.
“It’s incredibly sleepy at dealerships in the first week,” Krafcik said, adding that marketing tends to ramp up as the month winds down. “Consumers have been trained to come into dealers at that time.”
Based on TrueCar’s data, the first weekend in August—preferably on Sunday—is the ideal time to sign off on a new car. Average transaction prices drop to $29,300 on Sundays, a trend that Krafcik attributed to weekend sales quotas.
Dealers aim to maximize per-unit profits, but they also have volume targets for the weekend. Sunday is the day to play catch-up.
“This weekend would be an absolutely dynamite time to buy a car,” Krafcik said.
Many consumers don’t have the option of shopping on Sundays. About 20 states have laws that either restrict or ban car sales on Sunday, according to the National Automobile Dealers Association. Spokesman Charles Cyrill said it’s up to local and state governments to decide.
Krafcik said car and truck buyers have never had better options to choose from, with competition thriving in every segment.
“It’s a really great time for consumers,” he remarked. “It’s really astonishing how much car you can get for $25,000 now.”
Krafcik believes mid-size cars offer some of the best value on the market, calling it the top “bargain segment” right now. He said mid-size options have incredible fuel economy, styling and safety features.
Trade-ins also provide a valuable opportunity to knock down the price tag. The slowdown in auto sales before and during the recession created a shortage of used cars, thereby driving up prices. According to IHS Automotive, the average age of light vehicles on the road remained at a record high of 11.4 years in 2013.
Even with auto sales maintaining a strong pace, dealers are still “desperate for used cars,” Krafcik said.
“Consumers don’t realize how much their used cars are worth. This month, used car availability is at its lowest in ten years,” Krafcik said. “For owners who have a five- or six-year-old car, I don’t think there will be a better time to buy, at least for a while.”