With dealers eager to> move unsold inventory before the new model year, the end of the year is often the best time to negotiate a deal on a new car. This year, savvy buyers have a new tactic: Figure out which models have been sitting on the lot the longest and score a new car for up to 35% off the sticker price.
The days of waiting lists for hot cars are long gone. Most sit around for more than two months before they sell the average is currently 67 days, up from 63 days last year. American brands Chrysler, Ford (F)
For buyers, that means year-end discounts, cash-back deals and low interest-rate financing offers are all likely to grow as the year draws to a close, says Jessica Caldwell, senior analyst at Edmunds.com. The biggest discounts and most negotiating room will be on cars that sit on the dealership the longest like the 2010 Ford Mustang and Lincoln MKT which are taking upwards of 200 days to sell. "Holding that inventory is bad for your new car business," says Jonathan Banks, executive automotive analyst at NADA Used Car Guide, adding that buyers would often rather buy the cheaper 2010, especially if it's similar to a pricier 2011.
To get the best deals, you ll need to know the rules of the year-end discounting game, where to find information on the lot-sitting laggards and be armed with information. And if a car deal isn t quite as good as you d like, don t worry. In late December, automakers tend to roll out bonus incentives to dealerships to move more cars off the lot, which can mean better discounts.
Here are three ways to make the most of year-end car sales.
Know your model s age
After a model sits for 60 days, most dealers cut the price by about 7%, says Jesse Toprak, vice president of industry trends and insight at TrueCar.com. After 100 days, those discounts creep up; by 200 days, buyers can expect to get about 14% off the sticker price and possible cash-back offers or 0% financing. So that 2010 Mustang coupe, which has been on the lot for an average of 235 days, could sell for 15% off with $1,000 cash back a total savings of up to $5,000, according to TrueCar.com.
Find the latest inventory data
Of course, inventory varies from dealership to dealership. Consumers can get some insight into how flexible car prices are by checking out TrueCar.com s monthly report, which lists the models selling with the highest discounts. And you can zero in on a car s inventory at a specific car dealership. The better discounts are typically at dealerships with the most inventory of a specific model. Edmunds.com offers a view inventory service for most new models that shows which cars and how many dealerships have in stock. For example, a Cadillac dealership in Mahwah, N.J. has two CTS models in stock, while a Totowa, N.J. dealership just 30 minutes away has 46 cars in stock, according to Edmunds.com. Even popular sellers without much of a discount can be $1,000 more expensive a few hours away if a dealer is overstocked.
Dealers pay a small percentage of a car s value for each month it sits on the lot, says Burke Leon, owner of a used-car dealership in Orange County, Calif., and co-author of The Insider s Guide to Buying a New or Used Car. At a few hundred dollars per car, that adds up, especially when you consider that some dealers overestimated the demand for 2010 models. Meanwhile the 2011 models came out as early as February. Dealers don t want the newer cars to have to compete with the older, cheaper ones, so by mid-December, the automakers themselves will start offering incentive bonuses to dealers who clear out 2010 models. That's typically when buyers will find the biggest discounts, lowest financing and most flexibility. Also, investigate dealer auctions, the last chance for cars that don t sell on the lot. A 2010 model might end up there as early as December, and a local used-car dealer can place a bid on your behalf, Leon says. Depending on the vehicle, discounts can be up to 35%.
The Best Deals
Some cars sell faster than others. A look at the average shelf life of ten 2010 models.
|Automobile||Days on the Lot||Discount|
|2010 Ford F-250||166||21% off (to $21,247)|
|2010 Ford F-350||166||20% off (to $22,105)|
|2010 Jeep Commander||178||19% off (to $26,091)|
|2010 Ford Mustang||235||15% off (to $18,960)|
|2010 Lincoln MKS||171||12% off (to $37,914)|
|2010 Lincoln MKT||228||12 % (to $39,434)|
|2010 Subaru Impreza||165||11% off (to $16,126)|
|2010 Nissan Murano||45||10% off (to $26,245)|
|2010 Cadillac CTS||188||6% off (to $33,925)|
|2010 Toyota RAV4||48||5% off (to $21,466)|