When you think about shopping in August, you probably think about everything having to do with back to school—notebooks, new clothes, and more. But if you’ve been thinking about buying a new car, August may be the best month for you to hit the car dealerships.
According to Jack R. Nerad—executive editorial director of Kelley Blue Book/KBB.com, which provides vehicle pricing and values—there are definite reasons to buy a car in August. One is that dealers are looking to clear out inventory, just like retailers with bathing suits clogging the racks in September when they need to make room for winter coats. But unlike the seasonal changes in fashion, what’s driving deals on cars is the fact that the next model year officially starts October 1. “What this means is that dealers want to clean out their current inventory of 2014 models to make way for the new 2015s,” says Nerad.
As soon as the 2015s show up, consumers want them. “If you put two absolutely identical cars next to one another, but one is a 2014 and one is a 2015, the typical consumer will naturally want the 2015,” adds Nerad. “This implies that the older-model-year vehicles (in this example the 2014s) will have to be discounted to sell.” What does this mean for the car buyer who doesn’t care about a 2014 car versus a 2015? Significant bargains to be had. This is why you’ll often see dealer incentives, such as “factory-to-dealer cash,” “customer cash,” low-interest financing deals, and special lease offers in August.
Even though this is all great news for your bottom line, you’ll need to keep the following in mind if you decide to go car shopping in August:
- Availability of hot models, popular colors, and desirably equipped cars could well be limited. “By now virtually all manufacturers have finished building all the 2014 model year vehicles they are ever going to build,” says Nerad, “so you are confined to considering what is already on dealers’ lots.”
- Special orders are not available. That’s because production of 2014s (the potential “bargain cars”) is over.
- Depreciation is a reality. “In their frenzy to buy a bargain new car,” says Nerad, “many shoppers don’t consider the fact that the vehicle they are buying in August will be a year older from a value point of view on October 1.” In other words while every car depreciates the moment you drive it off the lot, your new-to-you 2014 will, in essence, have the same depreciation “value” as a 2014 model-year vehicle that was purchased a year earlier and has 10,000 miles on it. Of course, if you’re a car owner who drives a vehicle until the wheels fall off, this level of depreciation won’t matter in the long run. (That describes my husband and me. Currently, we have two cars—a 2003 Honda and a 2007 Ford—with north of 110,000 miles on the odometer.) “But if you trade in your new car every two or three years—and you actually do the math—you might discover that buying in August didn’t net you as much of an advantage as you believed,” says Nerad.
Just a quick search of current deals on 2014 cars turned up a range of offers, from zero percent financing for 72 months on certain 2014 Ford models to $1,000 cash back on some 2014 Toyota hybrids, such as the Avalon and Camry. So the deals are definitely out there. Then the question becomes, do you really need a new car? If so, August could be a great month to buy.
Leah Ingram’s favorite price is free! She is the author of 14 books, including two on frugal living. >Her book Suddenly Frugal: How to Live Happier and Healthier for Less was just released as an audiobook. Leah is the founder of the popular frugal-living blog called >Suddenly Frugal. Right now if you >sub>scribe to Suddenly Frugal, Leah will send you an exclusive freebie. Each week here on Parade.com she’ll be covering different money-saving ideas. If you have an idea, let her know. In the meantime, >follow her on Twitter @suddenlyfrugal and >“Like” Suddenly Frugal on Facebook.
Source : https://parade.com/328665/leahingram/is-august-the-best-month-to-buy-a-car/