While browsing through the Cadillac forum as well as other blogs I've noticed questions and comments as to when is the best time to buy a new vehicle. In this regard I will provide below some of my subject matter expertise with regard to buying a new vehicle, whether from the outgoing model year or from the new model year. My input is not applicable just to the Cadillac nameplate but also applies to any vehicles from the big three North American auto manufacturers. I am not too familiar with the marketing and sales of offshore nameplates so my narrative does not apply to that segment although I would think that some modified form of my suggested negotiating strategy would benefit you.
So, when is the best time to buy a new vehicle? Let's start with the purchase of the outgoing model year. The best time, of course, is during September when dealerships have to make room for the arrival of new model year vehicles. This is when manufacturers and dealers combine to offer rebates, discounts and other incentives to attract your attention and bring you into their dealership. They may even send out personal invitations to visit their dealership. When looking for a new vehicle during Sept, attempt to go there during the last 3 days of the month, the later the better. Here's why you should delay to month end. Typically car manufacturer's set monthly and/or quarterly quotas for the dealerships to sell a given number of vehicles (including SUV's and trucks).Let's say that a large volume dealership is given a quota to sell 90 vehicles during the month and if the dealership reaches or beats that quota the manufacturer will rebate to the dealer say $400.00 for each vehicle they sold. So, if you arrive at the dealership on the second last business day of the month, they may have already sold 87 vehicles and are anxious to sell 3 more before month end in order that they may receive the $400 dollar rebate which would amount to $36,000.00 ( 90 vehicles X $400 ). In this situation the dealership is very receptive to any and all offers as this means a big rebate if they reach their quota. Thus, you can make a low offer, say 30% below MSRP. Of course they will not accept that offer but will make a counter-offer. You may then counter back with another offer somewhere in between, but don't be too generous. If they don't accept your second offer, tell them you're not satisfied and walk out the door. I can almost guarantee you that they will phone you in a day or two and want to continue negotiating as they are desperate to reach their quota. Now you have the upper hand and can increase your offer price again, but don't be too generous, and now it's their turn to react. In most cases you can end up with a very reasonable price and they will ask you for a credit card deposit over the phone in order the seal the agreement. You will then have to go the dealership for the execution of the necessary documents and payment of the balance owing. At times a dealership may even sell you the vehicle at or below cost in order that they can get that big rebate at month-end. (In reality if a dealership sells you a vehicle at or below cost, they still, in fact, may make a profit of between 2 and 3 percent but that is another subject which I won't deal with here)
The same situation may play-out with a specific nameplate. Perhaps the manufacturer may set the dealership a quota to sell 20 Buicks during the month. If the dealership reaches or surpasses that quantity, they may be rebated $500.00 for each Buick sold. Of course you, the buyer, are not aware of what type of quota a dealership may have but rest assured they have one.
Here are a few details that I have assumed or are further to what I have provided above:
- I assumed you already have a car in mind, have test-driven it and are prepared to buy.
- Never show extreme excitement or urgency to buy because you become vulnerable and the salesperson has the advantage
- You have financing in place or can get it in a few hours.
- Although new model year vehicles are introduced throughout the year, Sept is still the best month to start shopping for vehicles from the outgoing model year.
- If the last day of the month ends during a weekend, the dealerships' month is extended into Monday of the following month.
- Manufacturers/dealerships have promotions to attract customers and clear out inventory.
- Outgoing model years get cheaper as each month passes but the selection also lessens.
- The rebate figures of $400 and $500 I provided may be more or less depending on the nature of the quota and/or the specific vehicle nameplate for which there is a quota.
- The dealership, of course, will not reveal to you what their quota number is.
- When negotiating the price, also think of dealership extras, ie mud flaps, floor mats, map update to navigation system, a tankful of gas, etc that can be thrown in without inflating the price.
The absolute best time to buy either an outgoing model year vehicle or current model year is the day of New Year's Eve. Why is that? Well, it is both month end and year end. As well, most of the dealership staff are thinking about New Year's Eve partying and are anxious to get out of the building. So if you arrive there at 2:00 o'clock, they may be receptive to close a deal quickly so that they have another sale in their pocket. During this period negotiations may progress rapidly and you will be the beneficiary. Another good time to shop for a vehicle is between Christmas and New Year's when business is generally slow at the dealerships.
Insofar as current model vehicles are concerned, manufacturers/dealerships are not as generous with rebates/discounts, but you should still submit a low offer on a vehicle you may like and remember, MONTH-END. Don't make an offer of 30% below MSRP on a current model year vehicle as you will not be taken seriously. As the months pass by, the current model vehicles become discounted through various manufacturer and dealership promotions and then they become outgoing models as the next model year arrives and so the cycle continues.
The above is just a brief synopsis of how vehicles sales are conducted and I welcome anyone to add to my narrative in order that others will read and benefit from our collective knowledge.
So, when is the best time to buy a new vehicle? Let's start with the purchase of the outgoing model year. The best time, of course, is during September when dealerships have to make room for the arrival of new model year vehicles. This is when manufacturers and dealers combine to offer rebates, discounts and other incentives to attract your attention and bring you into their dealership. They may even send out personal invitations to visit their dealership. When looking for a new vehicle during Sept, attempt to go there during the last 3 days of the month, the later the better. Here's why you should delay to month end. Typically car manufacturer's set monthly and/or quarterly quotas for the dealerships to sell a given number of vehicles (including SUV's and trucks).Let's say that a large volume dealership is given a quota to sell 90 vehicles during the month and if the dealership reaches or beats that quota the manufacturer will rebate to the dealer say $400.00 for each vehicle they sold. So, if you arrive at the dealership on the second last business day of the month, they may have already sold 87 vehicles and are anxious to sell 3 more before month end in order that they may receive the $400 dollar rebate which would amount to $36,000.00 ( 90 vehicles X $400 ). In this situation the dealership is very receptive to any and all offers as this means a big rebate if they reach their quota. Thus, you can make a low offer, say 30% below MSRP. Of course they will not accept that offer but will make a counter-offer. You may then counter back with another offer somewhere in between, but don't be too generous. If they don't accept your second offer, tell them you're not satisfied and walk out the door. I can almost guarantee you that they will phone you in a day or two and want to continue negotiating as they are desperate to reach their quota. Now you have the upper hand and can increase your offer price again, but don't be too generous, and now it's their turn to react. In most cases you can end up with a very reasonable price and they will ask you for a credit card deposit over the phone in order the seal the agreement. You will then have to go the dealership for the execution of the necessary documents and payment of the balance owing. At times a dealership may even sell you the vehicle at or below cost in order that they can get that big rebate at month-end. (In reality if a dealership sells you a vehicle at or below cost, they still, in fact, may make a profit of between 2 and 3 percent but that is another subject which I won't deal with here)
The same situation may play-out with a specific nameplate. Perhaps the manufacturer may set the dealership a quota to sell 20 Buicks during the month. If the dealership reaches or surpasses that quantity, they may be rebated $500.00 for each Buick sold. Of course you, the buyer, are not aware of what type of quota a dealership may have but rest assured they have one.
Here are a few details that I have assumed or are further to what I have provided above:
- I assumed you already have a car in mind, have test-driven it and are prepared to buy.
- Never show extreme excitement or urgency to buy because you become vulnerable and the salesperson has the advantage
- You have financing in place or can get it in a few hours.
- Although new model year vehicles are introduced throughout the year, Sept is still the best month to start shopping for vehicles from the outgoing model year.
- If the last day of the month ends during a weekend, the dealerships' month is extended into Monday of the following month.
- Manufacturers/dealerships have promotions to attract customers and clear out inventory.
- Outgoing model years get cheaper as each month passes but the selection also lessens.
- The rebate figures of $400 and $500 I provided may be more or less depending on the nature of the quota and/or the specific vehicle nameplate for which there is a quota.
- The dealership, of course, will not reveal to you what their quota number is.
- When negotiating the price, also think of dealership extras, ie mud flaps, floor mats, map update to navigation system, a tankful of gas, etc that can be thrown in without inflating the price.
The absolute best time to buy either an outgoing model year vehicle or current model year is the day of New Year's Eve. Why is that? Well, it is both month end and year end. As well, most of the dealership staff are thinking about New Year's Eve partying and are anxious to get out of the building. So if you arrive there at 2:00 o'clock, they may be receptive to close a deal quickly so that they have another sale in their pocket. During this period negotiations may progress rapidly and you will be the beneficiary. Another good time to shop for a vehicle is between Christmas and New Year's when business is generally slow at the dealerships.
Insofar as current model vehicles are concerned, manufacturers/dealerships are not as generous with rebates/discounts, but you should still submit a low offer on a vehicle you may like and remember, MONTH-END. Don't make an offer of 30% below MSRP on a current model year vehicle as you will not be taken seriously. As the months pass by, the current model vehicles become discounted through various manufacturer and dealership promotions and then they become outgoing models as the next model year arrives and so the cycle continues.
The above is just a brief synopsis of how vehicles sales are conducted and I welcome anyone to add to my narrative in order that others will read and benefit from our collective knowledge.
