There’s no one best time to buy a car, but there are things you can look out for that means you’ll get a deal. You’ll also need to know your finances and your requirements, and have a good idea of what a particular car is worth (usually by looking at a lot of them to get a good feel for it).
Buy a vehicle when you can afford it
Car loans have high interest rates and, unless you can borrow the money against the value of your house or another asset, you’ll end up paying a lot more than the car is worth in interest. Make sure you’ve got a good deposit and that you won’t need the money urgently in the near future.
Know your price, too. Set a budget and walk away if it’s more.
Look for desperate sellers
Sellers who are moving overseas have a time pressure to sell their car and might accept a cheap deal. At the beginning of summer lots of backpackers arrive and buy up a load of cheap cars they can thrash around Australia. When they go back overseas again after 3-6 months there’s a glut of cheap cars (often station wagons and vans). Check ads in backpacker hostels if you have one near you.
If you’re in the premium end of the market look for when interest rates rise. People who drive cars like Porsches can’t always afford cars like Porsches, but are doing it for the image. They often balance their finances on a knife edge and are susceptible to rises in interest rates that might affect their business holdings or their mortgages. This works best if you don’t have to borrow (otherwise you’ll be paying more, too).
Never buy when you are desperate (unless you have to)
If you are desperate you’re likely to take any old deal. Time pressures don’t make for good negotiating conditions. You ideally need some time to shop around, or have nerves of steel that allow you to walk away from a deal.
Look for vehicles that have had major scheduled services or repairs
If you’re buying a cheap vehicle, the cost of some of the major service items such as a cambelt change can be quite a significant portion of the overall cost. Look for a car that’s had this done already. If it’s just had four new tyres, that’s a bonus. Check it’s got a good service history so that you won’t have to give it a major service within a few months of buying it.
Buy vehicles other people are afraid of
If you’re handy with a spanner you can go for vehicles with high depreciation that are likely to break down or give you some kind of other grief.
Depending on your budget and requirements you could look for vehicles that aren’t particularly popular, or vehicle colours that are difficult to sell – this strategy works when it’s a cheap car that you’re likely to run into the ground.
There are psychological barriers that people have, too. For example, when a car has more than 100,000 kilometres, less people want it. However, in the UK, that’s only 62,000 miles and no one cares – they care when it’s 100,000 miles (160,000km) – it’s all psychology. Try looking for cars around the 100-110k range.
Buying from dealers
Buy when it’s quota time
The dealer principal (the owner of the car yard) will set sales targets and they are usually monthly and quarterly. At the ends of these periods the sales staff are more keen to do deals if they haven’t met their quota. Try purchasing near the end of the month because if their bonus is tied to having a good month, you might swing a good deal by being there at the right time.
Go to the yard at the end of the day
Make the dealer wait to go home. He might be more keen to cut a deal if he’s hungry. Bear in mind that taking a test drive at this time might be impossible, so you’ll nee to do your test drive first then come back later (and hope someone else hasn’t sold the car).
Buy when they have special offers
Dealers frequently have excess stock because they have a mixture of car sources:
- Shipments from overseas are booked months in advance, and they’ll need room on the yard
- New models coming in make old models look undesirable so the dealer will want to clear them
- Trade-ins happen all the time and dealers don’t want them hanging around.
Check out our article about the different types of cars you find for sale so that you don’t get caught with a lemon.
Yearly and six-monthly targets need to be met
New cars already registered (e.g. ex-demo) become at risk of seeming a year old the closer it gets to January – look for deals at the end of December).