The last place you probably want to spend the holidays is a car lot: It’s cold, it’s dark and you have other shopping to do. For these reasons, December used to be a slow month for car sales. But in recent years, it’s become an incredibly popular time “to move metal,” says Karl Brauer, a senior analyst at Kelley Blue Book, an automotive research company in Irvine, Ca. For that you can thank Lexus, which launched its “December to Remember” campaign in 1998 featuring cars gift-wrapped in giant red bows.
Of course, there are other reasons December is a popular month for car deals. Car competition is fierce, dealers are trying to clear inventory and they might be pressed to meet end-of-year quotas. “As you get closer to Christmas and the new year, the discounts will increase, so the savings will be better,” says Philip Reed, senior consumer advice editor at Edmunds, an online resource for automotive information. “The problem is, there’s sort of a tradeoff because the inventory will begin to be pretty restricted.”
Despite the limited options, bargain hunters can save on their next car if they’re strategic about it. For example, buying before the end of the year will allow you to claim tax benefits if the car is for business or environmentally friendly (depending on the state) for tax year 2015. Plus, while incentives like 0% financing or rebates may not be unique to the month, they are more widely available, Reed says.
On the other hand, December isn’t the best time to score a car deal. Though a lot of dealers have begun to hold Black Friday sales, the experts say Labor Day weekend is generally a better time to shop because that’s when dealers truly begin to make room for new inventory. Car shoppers may also be pressed for time, which can make it harder to do a thorough test drive and inspect the car, as Reed and Brauer suggest.
If you do decide to go car shopping this month, be smart and come prepared to clock some time at the dealer’s going through paperwork. If you’re trading in a car, have an appraisal on hand, and if you owe money, then bring the loan papers. Also be sure to check your credit scores for free on Credit.com, so you know where you stand in case you need to apply for an auto loan. (You can find advice on how to avoid making a mistake on your next car purchase here.) You want to get the best deal out there, and your finances will play a key part in that.
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