One of the best ways to save money on a new car is to buy at the
end of the model year. As dealers try to clear their lots to make
way for new inventory and to meet sales goals, they'll be in the
mood to bargain.
SEE OUR STORY:
2013 Cars: More Models, Fewer Incentives
The later in the year you shop, the better the deals. But if
you're picky about colors or options, get moving. The sooner you
start shopping, the more models you'll have to choose from.
Where the deals are.
The type of vehicle you're looking for will dictate the size of the
discounts you'll find. Small cars and crossovers have been in
demand due to high gas prices, so steep discounts are hard to come
by. But big sedans, SUVs and minivans are ripe for a deal.
According to estimates by
TrueCar.com
, an automotive data firm, the average transaction price of a
Chevrolet Impala will be 11% off sticker price this fall, a Ford
Edge will be 14% less than sticker, and a Kia Sedona minivan will
carry about a 10% discount. "If you need a family hauler, it's a
great time to be in the market," says Jesse Toprak, vice-president
of industry analysis at TrueCar. "The larger the vehicle, the
larger the discount."
Manufacturers have cut back on cash-back offers, which trim
profits. Cash offers also dampen resale values because the formulas
that predict used-car values reflect such discounts. But low-rate
financing and lease deals are plentiful. Automakers offer
incentives on the vehicles they most want to move, and vehicles
getting a redesign in the upcoming model year often get a
sweetener. For example, Honda is offering 0.9% financing for 60
months on the outgoing Accord, and Nissan offers the same terms on
the 2012 Altima (both have been redesigned for 2013). If you plan
to trade in the car within three years, keep in mind that you'll
take a bigger hit on the resale value if you buy the older model
instead of the redesigned version.
Because the used-car market is still hot, carmakers are offering
low-cost leases-for 24 months as well as the standard 36 months-on
vehicles they want to recycle into the certified used-car market
down the road. Lease a Hyundai Santa Fe for $269 a month for 36
months (it's redesigned for 2013) or a Volkswagen Jetta for $159 a
month for 36 months. Even pricey electric vehicles are quietly
being leased for less. Chevrolet offers the Volt for $269 a month
for a 24-month lease, and Nissan's Leaf goes for $249 a month with
a 39-month deal. Luxury carmakers typically roll out lease deals on
outgoing models close to the holidays.
Despite less cash on the table, there's room to negotiate.
Stair-step incentives-back-end bonuses for dealers that meet
certain sales targets, often by the end of the month-are persuading
dealers to accept less for a vehicle upfront, knowing the carmaker
will reimburse them later. Unlike factory cash rebates, you won't
find these incentives touted in ads. "There's more flexibility in
price than the incentive numbers you'll see," says Jessica
Caldwell, senior director of pricing and industry analysis for
Edmunds.com. You can find dealer as well as customer cash rebates
at
www.edmunds.com/car-incentives
.
Follow Jessica on
Twitter
and
Facebook
.
This article first appeared in
Kiplinger's Personal Finance
magazine. For more help with your personal finances and
investments, please
subscribe to the magazine
. It might be the best investment you ever make.