I love “behind the scenes” of any business. It could be something as mundane as a laundromat, I eat that stuff up.
One of my favorite “behind the scenes” episodes of any program was one titled 129 Cars on This American Life. In 2013, This American Life goes to a car dealership in Levittown, NY on Long Island and follows how they try to sell 129 cars before the end of the month. It's a fascinating peek behind the scenes of a dealership as they try everything they can to hit this quota because they missed the quota the previos month.
It underscores how badly car salespeople want to sell cars and how competitive that environment is.
When you walk into a car dealership, you are on their turf. You are at a disadvantage because you are the novice and they are the expert (most of the time. They've negotiated with hundreds of buyers and can size you up in moments.
They may be ahead but you have one thing they want – the sale.
You can use that to your advantage.
When is the best time to buy a car?
If you were to rely on intuition, and especially if you listened to that episode, your gut probably says the best time to buy a car is at the end of major time periods – the month and year. The final days of a month and the final days of a year are traditionally very good times to buy a car.
But that doesn't tell the whole story.
As it turns out, the day of the week matters too. Weekends are worse than weekdays because of the higher levels of foot traffic. More people go to dealerships on the weekend so salespeople are less likely to offer deals because there are more people in the showroom. If they don't sell it to you, there are more deals to be made.
If you want to maximize the discounts, the best time is near the end of a month or year when it falls on a weekday.
For 2018, those idea days are:
- January 29-31: Tuesday – Thursday
- February 26-28: Tuesday – Thursday
- March 28-29: Thursday – Friday (also end of a quarter)
- April 29-30: Monday – Tuesday
- May 29-31: Wednesday – Friday
- June 26-28: Wednesday – Friday
- July 30-31: Tuesday – Wednesday
- August 29-30: Thursday – Friday
- September 30: Monday
- October 29-31: Tuesday – Thursday
- November 27-29: Wednesday – Friday
- December 30-31: Monday – Tuesday
If you had to pick a single day, the best day in all of 2019 seems to be New Year's Eve – it's the end of the month, end of the quarter, end of the year… AND a Tuesday.
TrueCar Data says New Year's Day
Intuition may tell you that New Year's Day would be a bad day. It's the start of a month. Heck, it's the start of a year! There aren't quotas to meet and no one is feeling the pressure, so why is January 1st the best day?
Data says so.
TrueCar analyzed 12 million transactions over 5 years, from 2010 to 2015, and put out this infographic about the best time to buy a car. They determined the best day was January 1st when you'd expect an 8.5% discount off MSRP – the largest discount of any single day over that period.
|Day of the Week||Discount to MSRP|
There's a lot in that infographic but the biggest takeaway is the confirmation that weekdays are better than weekends. There's a ton of data (12 million sales) so small variations in discount will be significant. The 7.49% on Sunday is not a huge nominal difference compared to the 8.10% on Monday, but that is enough to show a big of a trend there.
What About Holiday Sales?
Car dealerships love an excuse to offer a sale and those long weekends are always good for a bevy of cash back deals and premium financing options.
But are they good deals? In many cases, yes.
Car dealerships are looking to turn those otherwise dull weekday sales numbers into a blow out holiday sales day number. With the day off, higher foot traffic can mean more sales and juicing it up with a deal never hurts.
You can objectively analyze these deals because the ads will tell you how much cash back and what the premium financing deals are – without you having to go in. You can compare that with financing you get at your local bank or credit union.
The best holiday days (and usually that closest weekend) for finding a car deal are:
- President's Day: Third Monday in February
- Memorial Day: Last Monday in May
- 4th of July: Fourth day in July 🙂
- Labor Day: First Monday in September
- Thanksgiving: Fourth Thursday in November
Remember Key Car Negotiation Principles
Picking the right time of the year to buy a car is important, it gives you a leg up before you walk through the door, but you still need to keep your wits about you. Remember key car buying and negotiation principles!
1. Set a budget and stick to it. You know how much car you can afford and the salesperson will try to sell you just a little bit more (by adding features and trim options you probably don't want or need), especially by using creative financing and monthly payment options.
2. Get financing ahead of time! By securing financing ahead of time, you know exactly how much you can borrow, what your payments will be, and that can be your anchor in the showroom. Salespeople will also try to play games with financing and their financing deals, unless it's a promotional offer, rarely beats what you can get at a bank or credit union.
(also, if you have a specific car in mind, get a free VIN check to identify any red flags)
3. Get quotes from multiple dealers. When we purchased our car, we contacted all the Toyota dealerships in the area that carried our make and model. We had them give us their very best price and had them compete with one another. We did this before we set foot in a showroom. You can do this entirely on the phone or via email, with quotes and sheet delivered by fax (if you have one) or email.
4. Never buy on the first date. If you don't get quotes from multiple dealers, don't buy a vehicle if it's the first time you've been in the dealership. Make that a hard and fast rule because you will start feeling pressure, you will like the salesperson and think he or she is a great person with your interests in mind (and they do have your interests in mind, they're not trying to trick you!), and you will feel like you can't walk away – but walk. It gives you more leverage later.
5. Bring a friend. When we finally bought our car, there were some last minute shenanigans going on and fortunately my wife went with a good friend who would have none of it. She worked in purchasing and she spotted all the sales games and tricks from a mile away, nipping them in the bud and saving us a lot of time and money in the process. Even if your friend doesn't have that experience, it's key to go in with more than one person… especially if one of them is deeply cynical. 🙂
6. Buy it. Once you decide to buy it, make sure you review the sales contract very carefully in case the dealership added a few things you didn't agree to. It's not nefarious, sometimes standard things you had removed weren't, someone messes up, who knows… but you have to check to make sure. If anything looks out of place, ask.
For convenience sake, have the dealership register the car for you (many will offer this by default because their systems are linked) so you can avoid a DMV trip. Also, you can sometimes have the car delivered to your house so you don't have to get a ride to the dealer (or some other coordinated effort) to pick up the car.
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Hmm…This is surely a good one, Jim. I never thought of a certain time of the year to buy a car. Maybe because of fluctuating interest rates I guess. Unsure. Back in 2011, I was a temporary car salesperson in training. Didn’t pan out well after the general manager cursed at me and then allegedly let another car salesperson allegedly steal my commissions after I sold an SUV to a couple.
When I buy a vehicle, I tend to buy it used and from a private owner. Thanks for this thought-provoking blog. 🙂
Jim Wang says
Like anything else, there are a lot of factors that impact any process and the best time is just one of them. The variance between the various days doesn’t seem to be particularly high (nominally, relatively there is a significance) but when the data seems to support intuition, it’s nice to show it.
I’ve never worked at a dealership (or any commission based sales job) but I imagine there are a lot of those sneaky shady games going on.
Tex Ginsburg says
At one time, I worked as a car salesperson. We have all heard how it is such a dirty business, but the reality is even worse. Like DNN, I too buy used and from a private owner. By doing so, not only do you avoid the dirty tricks, you are not paying somebody’s sales commission. The difference in price is huge.
To avoid buying a lemon, you can have a mechanic do a buyers survey for a small fee. This is harder to arrange when buying used from a dealership.
Jim Wang says
If you’re buying from a private party, an inspection is a must. It’s like a small insurance policy against bigger problems.
Car salesmen have told me that they get a small kick back from banks when you finance through the dealership. Therefore when we go in we say we have financing, but are open to what offers they may have.
Plus my own CU has had incentives only available through the dealership, so it doesnt hurt to see what they have.
John Wedding says
This is true. I got a teaser rate at my credit union: 1.99% for a used car loan. 🙂
We’re planning not to have to get a loan for the next one, though. Not paying interest is a great way to save money too.
It’s been a long time since we bought, but will keep this in mind!
Had a laugh when my dad said he thinks he got the salesman fired when he bought his latest car this year. Something along the lines of after a bunch of back-and-forth, got them to agree to a price and sign the paperwork. Then had to run it over to another building where management started trying to talk dad out of the deal to no avail. They made literally $0 on the sale. He walked in on a big all-hands meeting the next day when picking up some stuff.