Ringing in the New Year brings a chance for fresh starts and holiday deals. To save the most money, you’ll want deals on big-ticket items like a new car. As enticing as that new car smell can be, cars are expensive purchases. Just because it’s a holiday doesn’t mean you’ll get discount prices. Before you hunt down your newest ride, find out if January is one of the best or worst months to buy a car.
Is January Or December A Better Time To Buy?
If you have your sights set on a new car, you are usually better off buying it before the end of the year. Dealerships often have quotas they want to hit, so they may be far more motivated to lower your price on the last day of the month or year.
Car buyers save an average of 10.3% off the manufacturer’s suggested retail price (MSRP) in December. Buy a new car on December 31, and the average savings jumps up to 10.9%. For example, if the MSRP of your favorite car is $40,000, you could save an average of $4,360 if you buy on the last day of the year. Dealerships offer the most attractive holiday deals between Thanksgiving and New Year’s Day.
Wait a few days into January, and you’ll see the discounts plummet. While December is one of the best months to buy a new car, January is one of the worst.
If a new car is in your future, check out your local dealership before the end of the year to get the best price. Unless you catch New Year’s deals during the first few days, it may be months before you see a good deal again.
Will Car Prices Drop Due To Coronavirus?
While the coronavirus has wreaked havoc on our daily lives, it has opened the door to some better deals. You may be able to grab discounted prices from an owner selling secondhand or from a dealer who has too much stock and wants to unload last year’s model.
Car buyers may be able to land special financing terms, such as 0% interest or deferred payments. Some dealerships are offering payment assistance if you have lost your job or need assistance in paying your car payment.
When Is The Biggest Holiday Car Sale?
Holiday promotions give you the best cost savings, especially around Thanksgiving, Christmas, and New Years Day. You can also find promotional pricing during three day weekends like holidays around Memorial Day, the 4th of July, and Labor Day.
If you are experiencing financial hardship or don’t need a brand new car, don’t lock yourself into a payment plan you can’t afford.
Can I Negotiate A Better Purchase Price?
Buying a car is a significant investment. So why pay more than you need to? You have nothing to lose by asking for a discount, and there’s usually some room for improvement. Even if you negotiate perks like a year’s worth of oil changes, a few benefits are better than none. If you don’t ask, there’s a good chance you’ll be paying the MSRP sticker price.
Should I Wait To Buy Until My Credit Improves?
Buying a car usually requires taking out a loan. If you are in desperate need of a car and can’t wait, check with a credit union. They offer lower interest rates on car loans for their members. You may also qualify for financing through the car dealership, but keep in mind that their rates may be higher.
The amount of money you need for car payments changes depending on your credit score. If you have bad credit or no credit history, it takes time to build a credit score. MoneyLion’s Credit Builder Membership is a full-featured membership designed to help you work on your credit for just $19.99 a month.
As part of the membership, you can qualify for a loan of up to $1,000. Not only do you get a small loan, but your credit can improve as you make monthly payments on time. MoneyLion reports timely payments to all three credit bureaus. In fact, 70% of borrowers under this plan report a 60-point bump in their score in the first 60 days. Boosting your credit before buying a car saves money on interest rates, keeping more cash in your pocket over the long run.
Keep It Real
Be realistic about your spending before you buy, because cars are expensive. Take a good look at your finances to figure out what you can afford and make sure to give the Aqqru car calculator to get a real view on if you are ready to make this big purchase.
If you can’t fit the monthly payment into your budget, you may need to choose a cheaper car or wait.
If you can’t afford the car of your dreams now, get ready for the purchase by putting your finances in order. Pay down debt, save up money for a down payment, and work on improving your credit score in the meantime. Take the time to set yourself up financially and before you know it, you’ll be able to afford that new car.
Raise your Credit Score to Buy your New Car
Car prices are often the lowest year-end around major holidays, which means January isn’t the best time to buy. Picking out the best time to buy a car isn’t nearly as important as being able to qualify for a car loan. Negotiating your car price is always possible, but having a good credit score also keeps your costs down. Not only do you save money on interest, but it’s easier to get financing from many sources and compare deals.
Even if your credit score is in trouble, you can always work toward improving your score. Our Credit Builder Loan helps try to repair credit and raise your score.
Get started today with MoneyLion in five easy steps.