I keep getting the question: Should I buy in December? The answer is a resounding YES, and here’s why:
I have been talking on my radio show for years about December being a great time to buy a new car. In spite of that I still hear from people who say: “I am going to buy a new car right after the first of the year.” Generally, this will cost you substantially more money than buying in December and it’s been that way for as long as I’ve been in or around the car business.
For the most part, things are back to normal this year, and many of the December incentives started early to mid-November. Automakers are scrambling to help the dealers move the metal so they can start 2025 with dealerships ordering cars again. Most are currently overstocked, the exception being Toyota and Lexus. Dealerships, too, are trying to make their sales goals and secure their ranking in their respective markets.
In December, you have a lot of positive factors coming together as a car buyer. One big factor is automakers and dealers looking to pad their sales numbers to improve market share and rankings. Both dealers and car companies push for every sale they can get. Automakers push the dealers; the dealers push their people. It is an intense month for everyone in the car business.
To help the dealers sell cars, the automakers throw all sorts of incentives around-some visible to the public-but many that are not. Either way it benefits consumers. Lease payments typically fall, especially on luxury cars. There is always a fight between Mercedes, BMW, Lexus, and some of the others for supremacy. These “fights” bring impressive incentives.
Then there is the bonus factor. Auto executives at all car companies generally have big bonuses on the line for yearly sales targets, market share targets, and often both. The same is true inside dealerships. Many General Managers, Sales Managers, and even the salespeople have big bucks riding on performance. The synergy of all these people working as hard as they can to sell cars is good for anyone in the market.
Dealers get aggressive with trade values, too, during December and used car values have remained high this year. They know that January new car sales will be down and they try to stock up in December so they will have enough used vehicles to get them to the spring market. If you have a clean trade-in, not only will you get a great price on a new car, you’ll get top dollar for your trade during December.
So, why is January not the best time to get a bargain? Bean counters, plain and simple. Inside every car manufacturer, there are marketing people, and there are the finance staff-these are the people counting dollars. These two groups of people see things very differently. January rolls around and the “beans” as they are affectionately known, try to test the waters to see how little they can allocate for incentives without freaking out the marketing folks.
Each new year, the marketers know this is coming, and don’t fight it hard. After all, they have all year to make up the lost sales, especially in the fourth quarter. When incentive spending is down, as in January, new car prices go up. There are exceptions of course, like the previous year’s models if any are left, but it is not uncommon to see rebates fall in a major way as soon as the calendar flips to a new year.
Many people buy in December because their CPA or tax professional recommends they take advantage of some of the programs like Tax Code 179 for self-employed and business owners. If you fall into that category, be sure to check with your financial people to see if buying in December benefits you, but you have to do it by December 31 THIS YEAR.
As you know from another article I wrote this week, if you want the Federal Tax Rebate on electric vehicles and hybrids, you have to do that by December 31 this year as well. Odds are good they’ll get extended into 2025, and odds are also good they’ll be eliminated on January 21st, 2025. This is likely to cause a bit of a run on the eligible cars.
In the auto industry, some things change, while others do not. My 35-plus years of being a part of the industry tells me this year will be a huge month for the industry, relative to the rest of this year.
December 2024 will be the best month of the year to buy, January 2025 will be the worst. So, if you are one of the “wait until after the first of the year” people, rethink your strategy.
START NOW if you want to buy in December. Give one of our dealers time to find what you are looking for!
Photo Credit: Lexus.
