Here we are again, at the final weekend of the month, but this one could be especially important if you are already planning to purchase a new vehicle within the next 30 to 60 days.
August has been a strong month for new-vehicle sales, at least according to the dealers I talk with across the country. One reason is easy to identify: Automakers came into August with some exceptional factory incentives, and several manufacturers have enhanced their offers as the month progressed. Most of those programs are scheduled to expire Monday night.
Could the incentives be extended or even improved for Labor Day? Certainly. Automakers have been known to pull a rabbit out of the incentive hat at the last moment. However, inventories are now generally more in line with demand, and that could reduce the need for manufacturers to become even more aggressive in September. Nobody outside the automakers knows what Tuesday morning will bring, so waiting for a better offer is still a gamble.
That does not mean you should rush out and buy a vehicle you do not need. It does mean that if you have already decided to buy soon, you should compare the current offers before allowing them to expire. A deal you can verify today is worth more than a possible deal that may or may not appear next week.
There is another clock running if you have a trade-in. Trade values remain relatively strong, but they are beginning their normal seasonal decline as dealerships prepare for the next model year and every used vehicle effectively becomes another year older in the marketplace. The amount may not be dramatic from one week to the next, but waiting never makes a trade-in more valuable. Get a firm appraisal now so you know exactly where you stand.
If you have had credit problems, do not automatically assume you cannot qualify for a new vehicle. The credit market is unusually accommodating right now, particularly when manufacturers are supporting certain models through their captive finance companies. In Texas, Ford Credit has been approving an exceptionally broad range of customers on new F-150s under a program scheduled to end Monday. Approval is never guaranteed, but this is no time to reject yourself before a lender has even reviewed the application.
New vehicles can also be easier to finance than used ones because companies such as Ford Credit, Toyota Financial Services, GM Financial and Ally exist in large part to help their manufacturers and dealers sell new vehicles. The automaker may subsidize the interest rate, provide bonus cash or offer the lender additional flexibility that is not available on a used vehicle. Depending on your credit and the available programs, a more expensive new vehicle can occasionally produce a payment surprisingly close to that of a late-model used one.
Just be sure to compare the complete transaction. A large rebate may require giving up a promotional interest rate, while a low APR may replace part of the advertised cash discount. Ask my dealer to show you both options, including the selling price, trade allowance, interest rate and total amount financed. The biggest rebate is not always the least expensive deal.
Finally, the end-of-month dealer mindset is real. By the final few days, many dealerships are concentrating heavily on reaching sales objectives, manufacturer targets and internal volume goals. That does not mean every dealer will lose money on every vehicle, but it can create flexibility that was not available earlier in the month. And yes, dealers lose money on new cars regularly.
If you think your offer might be too aggressive, make it anyway. The worst answer you can receive is no, and you may be surprised by what happens when a dealership needs one more sale to reach an important target. You also do not have to spend Monday sitting in a showroom. Contact the dealership this weekend, identify the exact vehicle, get your trade evaluated and work out as much of the transaction as possible before the deadline.
Start at CarPro.com and click the button under “Find a Car Pro Certified Dealer Near You.” Choose the brand, enter your ZIP code and, most importantly, contact the Car Pro representative shown on the site, often it is the General Manager. Call or send an email before visiting so the dealership knows you are part of the Car Pro family.
That introduction makes a tremendous difference. Simply walking into a dealership—even one of my certified dealers—does not ensure that you will receive the Car Pro experience, pricing and personal attention.
If you are not ready to buy, do not let a deadline push you into making a bad decision. But if a new vehicle is already in your immediate plans, you have three good reasons to shop now: strong factory incentives, end-of-month dealer motivation and a trade-in that is likely to become less valuable while you wait.
Photo Credit: Kzenon/Shutterstock.com.