Holiday Car Buying Could Mean Tree-mendous Savings

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Add “car shopping” to your holiday shopping list if you’re looking for great Christmas incentives.

The holiday season is a time of celebration and cheer. They also represent the coming of a new year and a blank slate from which to start fresh.

Given its proximity to the New Year and tradition of making resolutions (potentially including your contribution to your company’s resolution board), Christmas may also inspire you to think about your financial goals for the coming year. Or maybe it’s time to get yourself a gift, in the form of a new or used car.

But whatever your reasoning, it begs the question: Is Christmas the best time to buy a car, or are you better off waiting for the ball to drop?

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Reasons To Buy a Car Before Christmas

Unless you’re planning to surprise your partner with a gift-wrapped car on Christmas morning, deciding to buy a new vehicle before Christmas requires some thought and planning. Fortunately, there are plenty of good reasons for car buyers to consider purchasing a car in early December.

December is a slow sales month

It’s the most wonderful time of the year but, for some, Christmas is also the most costly. In fact, 21.5% of Americans went into debt over Christmas spending in 2019, with 46% blowing past their holiday budget.

What’s this translate to for car dealerships? Slow, slow sales.

The auto industry is subject to the whims of seasonal trends, with its two peak sales seasons between March and the end of May and September through November. This can make it difficult for dealerships to meet sales quotas in other months, giving them reason to incentivize sales.

Though New Year’s Day and New Year’s Eve are typically considered the best days to buy a vehicle, Christmas Eve is also an attractive option because salespeople are eager to close deals and get home to their families, food, and gifts.

Year-end sales promotions

You’re less likely to head out and browse for cars with Jack Frost nipping at your nose. To drive (foot) traffic into their dealerships, dealers offer year-end sales promotions during winter.

December is also the time of the year where the calendar year, quarter, and end of the month all take place simultaneously. To boost car sales and meet sales goals, dealers discount their inventory and offer other incentives that savvy car buyers can take advantage of.

December ranks third in a list of months with the heaviest discounts on used cars. Dealerships offer 13% more deals than average in December compared to other months, beat out only by January (at 28.6%) and February (at 22.1%).

Buyers of new cars aren’t left out in the cold, either. A combination of dealerships trying to reduce their inventory of the previous year’s cars and manufacturers trying to reach their current yearly sales figures means discounts for new car buyers — most recently to the tune of 9% lower than the MSRP.

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End-of-month quotas

Salespeople work on commission, which means they receive a portion of the profits from each vehicle sold. However, dealerships may also expect their sales staff to reach monthly quotas to qualify for different bonuses — or simply to remain employed.

Christmas — on the 25th — takes place near the end of the month. With other considerations surrounding the holiday, dealers are likely more willing to make a deal with you if it helps them satisfy their quota as the end of the month approaches.

You frequently drive in harsh weather

Winter begins on December 21, 2021, but, for many, harsh weather begins sooner. Some vehicles don’t do well on slippery roads or are prone to getting stuck in the snow, complicating your commute or making holiday travel overly dangerous.

As a result, certain types of vehicles are more popular in winter than others. For example, if you’d like to buy a truck or SUV to better contend with inclement weather, Christmas car deals may be a great opportunity to do so at a discount.

You received a windfall of cash

41.6% of small businesses plan to give employees Christmas bonuses in 2021, with 79% of those businesses giving a pure cash bonus. Though you may want to treat a holiday bonus as earned income rather than a windfall, the extra cash could be used as a down payment for a new car.

Putting money down reduces how much you need to borrow to finance a vehicle purchase, so it’s a great way of saving on interest. In a way, it’s a bit like giving yourself a little gift too.

(You may reduce your loan balance and interest owed even further by using your existing vehicle as a trade-in.)

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Should You Wait Until After Christmas To Buy a Car?

The holidays are magical, but they’re also often hectic. It may be hard to set aside time to shop around for the best deal before Santa climbs down the chimney. From a financial sense, waiting to buy a car until after Christmas still gives you the opportunity to save a little dough.

New models are released year-round

Automakers traditionally released new models around October. This could create a frenzy of car buying, with all the associated bells and whistles surrounding vehicle sales events.

Unlike your family’s holiday traditions, this one has however come to an end. Now, automakers release new model years throughout the entire year. What’s that mean for you? Unless you need or want to, buying a car before Christmas isn’t the only time you’ll save some cash and land a great deal.

New Year’s might be better than Christmas (for car deals)

Though Christmas falls close enough to the end of the month, quarter, and year, two holidays one-up it: New Year’s Eve and New Year’s Day. This mix — a perfect storm — translates to great deals for you and, if a dealership hits its sales goals, significant sales.

Some car dealers may even extend New Year’s promotions into early January. In other words, buying a car at the end of the year lets you make a car purchase after all the hubbub of the holidays.

January is a better choice than December for used cars

Though car dealers aren’t all that likely to slash sticker prices in January for new cars, it’s a great time of year to buy a used car. Because dealerships want to reduce their inventory of outgoing models, you may be able to purchase one for the best price possible.

As Business Insider reported, January sees 28.6% more deals than average for a used car. So before you start putting away the yard decorations, take a trip to some local dealer lots to see if anything strikes your fancy.
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You can use your tax refund as a down payment

As with a Christmas bonus, your tax refund may supplement your income once per year. If you don’t need to use the money for other expenses or to reinforce your emergency savings, your tax refund may be used as a down payment for a new or used vehicle.

The IRS typically sends out tax returns within 21 days of you filing your taxes. In 2022, tax day falls on April 18 — too early (or too late) to be used near Christmas. However, it may be close enough to other sales events.

Sales events happen all year

Christmas, New Year’s, and even Memorial Day aren’t the only holidays that lead to lower car prices. Automakers and dealers offer discounts, rebates, and other promotions in all months of the year, giving car shoppers the opportunity for big savings.

Look out for promotions around other major holidays, such as:

  • Martin Luther King Jr. Day
  • Presidents Day
  • Memorial Day
  • Fourth of July
  • Labor Day
  • Black Friday

If buying a car around Christmas, or in December or January, doesn’t fit your needs, you’ve still got plenty of options throughout the rest of the year.

It’s the Most Wonderful Time of the Year (To Buy a Car)

Whether you plan on buying a new vehicle before or after Christmas, the holiday season is the best time of year for deals, discounts, rebates, and other promotions. It’s also not without its reasons for buying a new car: between travel, harsh weather, and simply the end of the year, it’s hard to argue against purchasing a vehicle around Christmas.

Despite the benefits of buying a car near Christmas, you’re not missing out if you can’t or don’t. Dealers and auto manufacturers run sales events throughout the year, so although you might miss out on the best deals, you still have plenty of ways to save throughout the year.

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About The Author


Daniel Mattia

Daniel Mattia is a freelance content writer and author. He's written extensively about insurance, personal finance, and small business. Daniel's past and current clients include The Zebra, Bestow, Ensurem, and others across a variety of industries.


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