You’ve seen those holiday commercials where someone gets a new car with a giant bow on top as a gift. A car is unquestionably an extravagant Christmas present, but those commercials should tell you something: the holidays can be a great time to buy or refinance a car!
At Addition Financial, we often have members ask us for car buying tips. Since there are some special circumstances when you’re car shopping around the holidays, we’ve put together this list of seven tips to help you out.
#1: Be Prepared to Buy Quickly
The first thing you need to know is that end-of-the-year deals can come and go quickly. Many car dealers will be eager to clear out older models to make room for new stock in the New Year. That can be a good deal for you – but it can also mean you’ll be in close competition with other bargain hunters.
Give yourself the best chance of getting the car you want by getting pre-approved for a loan and arriving with your checkbook in hand. That way, you won’t miss out – or get roped into an expensive dealership loan.
#2: Wait Until Christmas Eve
You might think that the last thing you want to do on Christmas Eve is to visit a car dealership, but it turns out there are some significant benefits to doing so. Many experts agree that Christmas Eve is the best day of the year to go car shopping, followed closely by the week between Christmas and New Year’s.
The main reason is that a lot of car dealers give out handsome rebates as the year winds down. You may be able to get more car for your money if you wait to buy until the end of the year.
#3: Choose a Less Popular Car Class for Bigger Savings
Some car models, including SUVs and compact SUVs, are more popular than ever. In fact, the manufacturing and sales of midsize cars, sedans and compact cars is down compared to trucks, SUVs and crossovers.
What that means is there’s less demand for cars and you can win out by choosing, say, a midsize car instead of an SUV. Dealers may be eager to unload last year’s cars and willing to make a deal to get you to drive one off the lot.
#4: Consider a Certified Pre-Owned Car
Even if you’re in the market for a new car, you may want to take a step back and consider a certified pre-owned car instead. It’s fairly common for businesses and private owners to trade in leased cars at the end of the year. That means there’s a glut of “gently used” cars to choose from and you may be able to find a bargain.
While a certified pre-owned car is a used car, they usually have low mileage and they’re also recent models. That means you can get a car in great condition without worrying about depreciation or poor quality.
#5: Research Before You Shop
It’s always a good idea to do some research before you walk onto a car lot. That way, you’ll know what’s available, what models you prefer and what a reasonable price would be for the car you want.
If you’re in the market for a new car, sites such as Cars and TrueCars can help you get the lowdown on prices. For used cars, start by researching the Kelley Blue Book price and go from there.
#6: Make Sure the Conditions Are Right for Refinancing
At the end of the year, it makes sense to reevaluate your finances and find ways to economize and save in the new year. One way to do that is to refinance your existing car loan. However, it’s important to ask first if the time is right to refinance:
- Can you save money on your interest rate?
- Are you upside down on your loan?
- Are there penalties for paying your existing loan early?
The answers should be yes, no and no for it to make sense for you to refinance at the holidays.
#7: Choose the Shortest Term You Can Afford
This tip applies to both purchasing a car and refinancing your existing car. Having a short term on your auto loan means that you’ll pay less interest and build equity in your car quickly.
Another way of looking at it is that you should consider more than the monthly payment. The total cost of your loan matters and can make a big impact on your long-term financial picture. We recommend looking at your loan both ways and making the decision that will save you the most money.
While you can buy a car at any time of year, the holidays are the ideal time in many ways. Provided you do your research and know what to expect, the seven tips we’ve outlined here can help you buy or refinance your car this holiday season – and get a great deal!
In the market for an auto loan? Click here to learn about Addition Financial’s flexible auto loan options now!
Posted on Oct 30, 2019
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