End of Year Shapes Up to be Prime Car-Buying Time
If the spirit of giving - or of treating yourself - has inspired you to buy a car this holiday season, you're in luck. Many local auto dealerships are overflowing with sedans, trucks and SUVs, so there are deals to be had.
Most dealers have abundant supplies of 2013 models, and 2014s are arriving as automakers keep factories humming. Since dealers pay interest on money borrowed to buy the cars, they're probably anxious to sell them soon.
"We have a lot of inventory right now," said Tammy Darvish, vice president of a 21-dealer group in the Washington, D.C., metro area that sells Toyota, Ford, Kia, Chrysler, Volkswagen and other makes.
The December holiday season normally is a good time to buy as dealers clear out old models and sales people feel pressure to meet year-end targets. Some sales ran early this year as automakers tried to get a piece of the Black Friday retail holiday.
Normally you can get 5 to 6 percent off the sticker price when dealing, but that could rise to 8 or 10 percent this month, said Alec Gutierrez, senior analyst for Kelley Blue Book. That means, for instance, you can get roughly $1,880 to $2,351 off a 2014 Chevy Malibu 1LT with a sticker price of $23,510.
Consumers have been in the spirit of buying cars for the past three years. U.S. sales are expected to reach 15.6 million this year, compared to just 10.4 million in 2009. And the latest retail sales figures from the government show that steady hiring and rising household wealth are encouraging more big-ticket purchases.
CARS TO LOOK AT
The bargains, dealers say, depend a lot on what car, SUV or truck you want to buy. The best deals now are in the small and midsize car segments.
Toyota, for instance, is offering $1,750 cash back on the midsize Camry in the Washington area, and competitors are following, Darvish said. That's before trying to make a deal. "I'm seeing some incentives that I have not seen as high as they are," Darvish said.
Ford dealers nationwide have about a 90-day supply of Fusion midsize cars, while other manufacturers' dealers have 75-80 days of midsize car inventory, Gutierrez said.
There also are some good deals on pickup trucks as Ford, which has the oldest big truck in the market, offers discounts and forces other automakers to follow, Gutierrez said. Ford is offering up to $8,500 off a 2013 Ford F-150 XLT Super Cab with a sticker price of around $30,000.
Don't completely ignore some of the hotter segments, such as small crossover SUVs like the Honda CR-V and Ford Escape, Gutierrez said. But some SUVs, such as the Jeep Grand Cherokee, aren't selling at much of a discount, Darvish said.
Luxury car dealers advertise heavily for the holidays and offer good lease deals. Lexus, with ads that feature giant red bows on car rooftops, is offering to lease an ES sedan for $359 per month for 27 months with $3,200 down.
MORE DISCOUNTS COMING
As tempting as it might be to have a gift car sitting in the driveway Christmas morning, Gutierrez says the last weekend of the year is typically when prices are the lowest.
"Everybody wants to hit whatever internal targets they have," said Scott Fink, CEO of a small chain of Hyundai, Mazda and Chevrolet dealers in Florida's Tampa Bay area. "The ultimate winners are the consumers."
In addition to the high inventory, there are other factors in consumers' favor: Interest rates are low and used-car values are still close to record highs, making trade-ins worth more money.
Also, automakers still are offering sweet lease deals, with leases running at about 25 percent of sales, near a record high, Gutierrez said. Electric car lease deals are especially good, he said. Some dealers are offering the electric Nissan Leaf for $199 per month for 36 months with $2,000 down.
If you wait until next year you run some risks. Interest rates may rise and trade-in values are likely to drop a bit, Gutierrez said.
"You're not leaving a ton of money on the table" by waiting, he said. "But really there's no time like the present."