When is the Optimal Time to Purchase a New Vehicle?

Purchasing a new vehicle is a significant investment, and timing is everything. Whether you're in the market for a fresh automobile or need to replace your current one, knowing when to buy can make a substantial difference in cost and satisfaction. Read on to discover the optimal times for new car purchases and the factors to consider.

Festive Seasons and Dealer Deals

Traditionally, festive seasons like Dussehra and Diwali in India, and the winter months in the western hemisphere, are prime times for car purchases due to competitive offers and promotions from dealerships. Dealers often provide attractive discounts during these periods, taking advantage of increased consumer spending. Additionally, in January, many dealerships offer additional discounts on old models (typically those manufactured more than a year ago) to clear out inventory from the previous model year.

Serial Purchases and Waiting Periods

These days, due to the global supply chain and component shortages, there can be significant waiting periods for new vehicles, often stretching to four weeks or more. Therefore, planning and shortlisting makes the process smoother. On average, you can expect to incur about $1000 per month in associated costs, categorizing as follows: registration, insurance, gasoline, maintenance, and car payments. These expenses can add up, so it's crucial to consider your financial readiness before making a purchase.

The Best Month to Buy a New Car

In North America, the best time to purchase a new car is often February. Following the major Christmas rush, dealerships are typically slow to restock, leading to better deals on both current model year and leftover models from the previous year. This period offers great opportunities for cost-effective purchases.

Considering Your Needs and Affordability

The decision to purchase a vehicle should be based on both your needs and your affordability. If you're price-sensitive and have an overpriced trade-in, leasing might be a viable option. The extra money from the trade-in can significantly lower your lease payment, making it more manageable.

Industry Profits and Supply Chain Issues

The automotive industry is currently facing numerous challenges due to supply chain disruptions, semiconductor shortages, and ongoing global events. As a result, dealers are making substantial profits, often tens of thousands of dollars per vehicle. This situation is likely to continue until broader economic conditions improve post the 2022 elections. It's essential to keep an eye on market trends and be prepared to make your purchases strategically.

A Personal Insight

As a former new car dealer, I can confidently share my experience: recently purchasing a 2019 Genesis with 17,400 miles from an internet company and visiting my local Hyundai Genesis dealership to compare prices. The difference between a 2021 Genesis (which was on the market for a longer period) and a 2019 model was merely two side marker lights, yet the price gap was over $41,000. This stark difference underscores the importance of knowing exactly what you're buying and where to find the best deals.

As businesses across the board continue to profit from supply chain issues, it's wise to plan your purchases before the entire economy destabilizes post the 2022 elections. My advice is based on well-informed observations and experiences in the automotive industry. I hope this information has been helpful.