Various factors contribute to the final price of a used car, including the time of year. Much like when buying real estate, sellers have certain months that benefit them, and so do buyers. Below is a detailed discussion of these factors, so that you can plan to buy your next car at a time that favors you.
Facts And Myths About Used Car Seasonality
There is much back and forth about if the seasonal changes affect prices of used cars. For instance, there are those who believe that used car prices shoot up around the holidays like Christmas or high school and college graduations, since people want to buy cars to give away as gifts. Others yet think the tax season is a huge price-hiker, since tax refund checks provide unanticipated income that can put down-payments on vehicles. There are others who attribute a hike in number of trucks sold just before the hunting season.
Depending on where you live, these may be both true and untrue. However, there are certain months which favor car buyers, supported by statistical evidence.
Seasonal Price Trend Explained
Majority of used car dealerships gradually increase their vehicle prices and then gradually drop them. Research has shown that prices of used cars are reduced about 1-2 times monthly in various dealerships. Another report showed that prices decline most often between July and October, when vehicle sales numbers decline.
As a general guideline, summer months are good seasons for buying cars. Dealers’ prices tend to decline in the summer through to early fall in order to unload the stock in the dealerships.
Tax Refund Season Explained
Many people start getting their tax refunds around February and many of them direct the money towards making down-payments on new cars (as in, new to them, used or not). Therefore, you are unlikely to see car prices reducing in the early months of the year, especially soon after February.
End Of Year Price Surges Explained
As fall comes to a close, car dealerships sell cars very aggressively, a trend that is carried through right to the end of the year. Some of the time, this is because car salesmen are trying to meet their end of year deadlines and maximize commissions to make the holiday spending less strenuous. Other times, they just want to clear their parking lots to get new inventory in the New Year. A small part of this can also be attributed to holiday shopping and spending.
Helpful Tips For Buying Used Cars
Generally, car prices may decline towards the end of the month, since salespeople are more lenient to allow them meet their sales monthly quotas. Buying towards the end of day may also have a similar effect — urging the dealer to close one last deal before closing shop for the day.
No matter when you buy a used car, however, thorough car inspections are recommended. If you are close enough, you can do it yourself, but it pays to have a trained, qualified inspector to go over the vehicle with a fine-toothed comb. This way, you can ensure that no defects were missed, and that you are getting a good product for your buck.