On the hunt for a used set of wheels? You may not want to go shopping in the late spring and summer months, according to a new study.
In analyzing more than 40 million used-car sales from 2013 to 2015, iSeeCars.com, a deals site for used vehicles, compared certain times of the year, such as days of the month and week, to determine whether customers can score more or fewer deals than average. (A deal was defined as a savings of 5% or more.) Based on those findings, the site then listed the 10 worst times to find a deal. (You can learn how to save $3,000 on your next car here.)
Holidays in the late spring and summer months make up most of the list.
“This is the typical time of year when dealers see higher demand, and therefore less of a need to drive sales through lower pricing,” Phong Ly, iSeeCars.com CEO, said in a press release. “After the current new car model year comes to a close around August, consumers start trading in their used cars in higher quantities, thereby increasing the number of used cars available after the summer and driving dealers to make better deals.”
Read on to find out the worst times to go used-car shopping, and be sure to review your two free credit scores on Credit.com so you know what kind of financing you may qualify for.
In analyzing more than 40 million used-car sales from 2013 to 2015, iSeeCars.com, a deal-ranking site for used vehicles, compared specific times of the year, such as days of the month and week, to determine whether customers can score more or fewer deals than average. (A deal was defined as a savings of 5% or more.) Based on those findings, the site listed the 10 best times to land a deal.
“It’s always nice to save money, and when you are buying something as expensive as a car, saving even 5% of your purchase, or $952 off the average price of $19,040, can really add up,” said Phong Ly, CEO of iSeeCars.com, in a prepared statement. (You can learn how to save $3,000 on your next car here.)
Read on for the best times to go used-car shopping, and before you hit the lot, be sure to review your two free credit scores on Credit.com so you know what kind of financing you may qualify for.
“Between year-end promotions and dealers scrambling to take advantage of the last few months of the year to meet their sales quotas, the conventional wisdom of shopping for a car at the end of the year holds true, though there are some holidays that are better times,” Ly said.
While Martin Luther King Day and Columbus Day typically aren’t thought of as major retail days, Ly said “dealers tend to make a big push to boost sales in the late fall and early winter by offering bigger deals.”
“These holidays are a great reason for dealers to pump up promotions — especially as two of the three are always observed on a Monday, which means shoppers have a long weekend to find the car they want to purchase,” Ly said.
America’s new love affair with auto leasing offers some unexpected good news to drivers looking for used car bargains. A coming glut of end-of-lease cars will dump millions of used cars on the market in the next year or two, almost certainly lowering prices on relatively low-mileage, late-model cars with most modern amenities.
Leasing exploded in popularity during the early part of this decade, hitting an all-time record in 2014 (since repeatedly eclipsed: You can read the full story here). Two and three-year leases signed then will begin to come on the market this year, adding an estimated 800,000 extra used cars into the market, according to a report by the National Automotive Dealers Association. It conservatively estimates that used car prices will actually fall an average of 2.5% each year for the next three years.
Why Drivers Should Care
“The expanding pool of used vehicle supply, spearheaded by off-lease growth, will gradually compress used vehicle prices as time passes,” the report says. “Under this assumption, prices would be at their lowest point since 2010.”
That’s good news for all drivers, as prices for both new and used cars have risen steadily in recent years, fueled by record auto sales across the board. During the recession, drivers held on to cars longer, reducing the supply of used cars, helping push prices up 18% from 2007 to 2014, the report says.
Edmunds.com found that average used car prices set a record last year, reaching $18,600.
Pushed largely by the influx of millions of end-of-lease cars, dealers have aggressively expanded their so-called certified pre-owned sales efforts. Consumers are drawn to CPO sales because these used cars come with new-car-like warranties and benefits. CPO sales also hit a record last year, Edmunds said, and have climbed 55% in the past five years.
“The key factor driving all of the trends in used car sales today is the popularity of leasing, which is bringing younger and higher quality used cars back to the market,” Jessica Caldwell, Edmunds.com Director of Industry Analysis, said in a press release. “We’re truly in the midst of a Golden Age for CPO and near-new used cars. And with a record number of lease terminations expected in 2016, for the foreseeable future there certainly will be no shortage of supply to meet the growing demand for used cars.”
An eye-popping 54% of used vehicles sold last year were three years old or younger, Edmunds says, and the average age of used vehicles sold edged down to 4.4 years in 2015 from 4.6 years in 2014.
All those new-ish end-of-lease vehicles becoming available will eventually become a “big problem” for car dealers, Caldwell recently told AutomotiveNews.com. But a problem for dealers could be a boon for you. So what should you do?
Used-Car Shopping 101
If shopping for a new car, investigate certified, pre-owned offers, too. Dealers know they have a big pile of leases ending within the next 12-24 months, so they will be willing to bargain.
Also, in a bit of a reversal, don’t be afraid to shop for a used car during the busy months. While it’s generally easier to get a deal during winter when sales are slow, end-of-lease cars will pile up during spring and summer, when sales picked up two and three years ago. You could benefit from showing up during a busy week of lease returns.
Finally, not all used car categories will be impacted the same, so if you are looking for a deal, pick the right car.
“The supply effect on used prices will be most pronounced on subcompact cars, compact cars, compact utilities and midsize utilities—both non-luxury and luxury. Utility and truck prices will be cushioned somewhat from supply’s blow by low gas prices and stronger consumer demand, while car segments will enjoy no such buffer,” the NADA report says.