The Best Time to Buy a Car: Part 2
Last week we exploded some of the myths and covered a few facts to do with the best time to buy a car. This week we conclude our piece with some more tips for timing your purchase to ensure get the best value when buying a vehicle.
Often when a manufacturer replaces an existing model with a new model they offer all sorts of incentives on the old model to clear out existing stock. A recent example of this is when Chevrolet was replacing the unpopular Cobalt with the new Cruze. To keep sales up on the Cobalt and keep its manufacturing plant in business, Chevy announced some unbelievable incentives on the older model.
“Cobalts were going out the door for $9,995, with $4000 worth of incentives,” recalls Steven Lang, mentioned in the first part of this article as running a car auction house in the Atlanta area and being a regular contributor to TheTruthAboutCars.com. It pays to keep an eye on what cars are coming out soon in order to grab a bargain from older stock that the manufacturers are keen to get rid of.
The same principal holds true with buying used cars. Often certain models will offer great value because there are a lot of them for sale. It’s widely regarded that the sweet spot for buying a used car is around 5 years old, so keep track of cars of around that age when shopping for a used vehicle. Likewise, more popular, harder to find vehicles will represent worse value for money. Examples of this are Toyota trucks, which are regarded as being overpriced in the used market due to high popularity and shorter supply.
World events can often drastically and suddenly change the availability of certain cars. A recent example of this was the recent tsunami in Japan. Lang points out that “if it weren’t for the recent tsunami ... I’d think you’d be able to get a great deal on a Toyota Yaris.” Ward’s Auto reported at the time that Toyota had enough stock of its unpopular Yaris subcompacts available in March to last for 105 days worth of sales. In comparison they only had 32 day’s worth of Prius hybrids, which meant that getting a good deal on a Yaris would have been much easier than finding a bargain on a Prius.
But the tsunami changed all that, drastically lowering Toyota’s home-based production and making the Yaris almost as rare as the Prius. So people who could have snagged a bargain on a Yaris prior to the tsunami were soon in the situation of trying to get hold of the car while it was still in stock, pushing up the value of the used models. The natural supply and demand cycle means this naturally makes other models cheaper again.
The moral of the story is to keep an eye on world events and try to recognize good opportunities to either grab a bargain on a car purchase or make a profit on a sale that wouldn’t have been as lucrative before.
Watch the Market
Like all markets, the new and used car market is subject to fluctuations based on a range of factors. There will be times when the industry as a whole is flat and times when it’s more of a seller’s market. It pays to keep abreast of the latest news when it comes to what’s happening in the auto market so you can recognize patterns and take advantage of them.