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Best time to buy a car: December

Date posted:  11/29/17 01:00:00 PM December might be a great time to find a great deal on a new car.

Have you ever dreamed of a new car with one of those gigantic ribbons they show in commercials during the holidays? While the dealership may not oblige you with a bow, buying a new car for the holidays—or any time in December—might be a smart move, and not just because it's a show-stopping gift.

According to several auto sales experts who spoke with Time Magazine, December is often a sweet spot for savings‡ when it comes to new vehicle purchases. In 2016, December car buyers saved an estimated 7.7 percent of the manufacturer's suggested retail price, or around $300, compared to any other month of the year. And this wasn't a one-off scenario. The last month of the year is often the best time to spring on a deal, as long as it's a decision you've put plenty of thought into beforehand.

Why it's better to buy a car in December

The factors influencing this trend are many, according to automotive finance guideKelly Blue Book:

  • Most dealerships have monthly and annual sales quotas they need to hit to maintain a steady pace of inventory in the New Year, not to mention the bonus and incentives they may receive for exceeding those quotas.
  • Both dealers and manufacturers turn competitive as December rolls around. Car makers might be jockeying for position as the best-selling car of its kind in the year, and offer sales incentives to eke out a victory.
  • Many states levy a tax on unsold inventory for the year, making it advantageous for dealers to move as much of it off the lot as possible before December 31. In many cases, they also simply need space for new models.

Perhaps the most obvious reason why cars sell for less in December is that fewer people are buying them. The stress of the holiday season combined with the arrival of winter's chill is more than enough to deter most people from car shopping. But for those who have had their eyes on a model and have done the research, it could be the perfect opportunity to make the purchase.

New cars only

Before rushing off to the first car lot you can find, remember that December prices generally only apply to new car models released in the last year. That means even though you will be its first owner, that car's value will decline significantly the minute it rolls out of the garage. This is the unavoidable nature of new vehicle purchases, but it's possible to mitigate the effect somewhat by shopping for resale value.

Cars with the best resale value remain in demand for years after their first owner because they are reliable, easy to maintain and meet a variety of needs. Practicality is key here, which is why small- and mid-sized sedans tend to see the least depreciation. Take time to do your homework and find a car that makes sense for your life, your budget and your willingness to maintain it.