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Tis the Season for Steep Year End New Car Discounts

By | Published November 19, 2013

Maximize savings when buying a new car at the end of the year

Every year in the late fall is when our site visitors get busy shopping for new cars. There is a real art and science to buying cars during this critical time period and maximizing your savings at the end of the month. Historically CarBuyingTips.com visitors have reported massive savings off sticker price during the last week of December. But what is so sacred about that week and how do you use that to save the most money?

You'll see other car buying "experts" rehashing each other's advice and tell you December is the best time to buy, but they don't tell you why. We'll show you how and why. Understanding is crucial to your savings. We'll take a sneak peak into the world of dealer rebates, incentives and other cash programs. You'll be surprised at some of the discounts we mention here that you would never have guessed existed. Overlook one potential cash bonus and you could leave thousands on the table. Now it's time to get your own gift while the rest of the country is focused on Christmas shopping.

Why the last week of December is the best time to buy a new car

chevrolet close up

To understand the logistics of what is going on at dealerships, let's look at the overlapping model years that car dealers are faced with. Here we are in November and most of the new vehicle models for next year have arrived, but some of the current model year vehicles are still in stock. A few dealerships might even be stuck with a few stragglers from 2 model years back.

As the end of December approaches this presents a logistical inventory issue for car dealers that, if not managed correctly, could spell disaster. For example, by January 1, 2014 they don't want any 2013 models on their lot because they will be last year's models. These cars become the kiss of death for a dealer when everyone is focused on the next model year with the latest greatest options.

To reduce this inventory floor plan problem, the manufacturers give the dealers what we call secret factory to dealer incentives. These incentives provide extra marketing cash to help them reduce the selling price of the current year models before the end of December. Often these incentives are thousands of dollars and go unnoticed by consumers who are focused on the customer rebates they see on TV. As a smart shopper, you are now aware of this and can reap huge savings. Also, if you buy the tail end of a model year, this puts you at an advantage later on when you sell your car because theoretically you'll have 12,000 miles less than another seller who bought the same car 12 months earlier.

The super secret bonuses that only the dealer knows

Let's say the manufacturer has a sales goal setup for a dealership and they only need to sell 1 more car to qualify for a huge bonus or a much better allotment of a new model that everyone wants. The dealer will be begging you to take this huge discounted price so they can move the car off the lot and secure their bonus. These bonuses are back door deals that you cannot lookup anywhere but you can be sure they exist. The only way to flush these out in the open is to put several dealers in play using sites like TrueCar, CarClearanceDeals and Cars.com. Ask them all for their lowest price. You'll find out quickly which dealer is close to a bonus when one quote comes in lower than all the others. Cha-Ching!

It's crucial to know what incentives are and how to claim them

These are crazy Jeff's extreme coupon days. Finding all the incentives and rebates is like hunting for coupons. Some of them are stackable to magnify your savings too. There are a lot of blurred lines and confusion here, so let's go over the common incentives we are seeing lately:

Wow, that's a boat load of savings. I bet you were only thinking of the consumer rebate and possibly missing out on a lot of these others. So right now, I'm wishing I was a recent college grad cop, who is also a part time military member of USAA rounding out my savings by going for a repeat customer discount stacked on top. Keep in mind with some incentives the manufacturer requires you to finance through them. For example, GM may require you to finance through Ally Bank. Ford might require you to get your car financing through Ford Credit.

How to find what rebates and secret factory incentives are available

There are two sites we use to search both rebate and incentive information and also the important new car dealer invoice and MSRP pricing information. FightingChance is one who sells a useful market intelligence package updated bi-weekly giving you all the rebates, incentives and pricing numbers for all trim levels of the vehicle you are considering. FightingChance also gives you a lot of useful advice in their package and they give you powerful intelligence on recent selling prices reported around the country for your vehicle and current inventory levels to help you swoop in for the kill. The better things in life you have to pay for and this in one that is worth every penny.

As backup we also like to use the rebate lookup tool at Edmunds. You should be using a combination of these two tools because they are different. You will then make note of all these rebates and incentives and load them into our Buyers Offer Spreadsheet from our free download area. Our spreadsheet helps you see through all the smokescreens and tells you how much you should be paying for your new car.

Quick sample of current rebate and incentives

We just took a quick glance at the offerings from many manufacturers and here is a short view across the landscape:

Some dealers still try to scam you with rebates

Some dealers love to play shell games with the pricing. Suppose the factory is giving you $3,000 customer cash. You might be looking at a new car with a window sticker price of $25,000. Due to the rebate the selling price is reduced to $22,000 and you think the dealer is discounting the car by $3,000 for you. Oh, but wait, there's a flag on the play. One important point for you to remember is that rebates come from the manufacturer, not from the dealer. So they are really selling you that car at full MSRP. Do you see the scheme unfolding? Many "no haggle" dealerships like to play this card.

Of course the salespeople will often try the old fake crying on your shoulder line saying "we are giving you $3,000 off this car, we can't go lower." Sure they can go lower! They are not giving you $3,000 off the car, it is the manufacturer who is giving you the discount which means it's time to ask the dealer to start contributing to the deal. This is why it's so important for you to use our spreadsheet to do all that thinking for you. It helps you see through their cash flow shell games and guides you to the price you should be paying.

All incentives should be subtracted after you have already haggled the selling price down, not before, to make sure that both the factory and the dealer have participated in the discounts.

Research wisely, use the information you've learned here and turn over every rock to find all the savings you can. Squeeze all the blood out of that stone. Read our new car buying tips and keep in mind that anyone who has been educated by CarBuyingTips.com can save money any time of the year. The end of December potentially provides more savings because you are leveraging customer rebates with factory to dealer incentives, along with super-secret bonuses.

Be sure to let us know how well you did after you buy your new car. Please leave comments or ask questions below.

Author Jeff Ostroff

About The Author: Jeff Ostroff is a consumer advocate, Founding Editor and CEO of CarBuyingTips.com overseeing a team of expert authors. For over 17 years, he's been the recognized authority on car buying, leasing, used cars and financing. He developed sophisticated spreadsheet tools to help consumers negotiate on a level playing field. He is a widely sought out guru, cited by the press for his expertise in savvy car buying and preventing consumer scams. Jeff has been quoted in CNN, Bloomberg, MSNBC, Wall street Journal, Consumer Reports, NY Times, Reader's Digest, and many live call in radio shows. He has covered the automotive space since 1997. Jeff also has extensive experience and expertise in selling used cars for clients on eBay and Craigslist. Connect with Jeff via Email, Twitter or on Google+.

CarBuyingTips.com has affiliate referral relationships with multiple web sites. This means that for many of the links you see on this site, we are paid referral fees for leads generated from visitors that click on links or fill out forms on this site. In some cases we are paid a commission for a purchase made on a site that is linked to from CarBuyingTips.com. Please view our advertising policy page for more information.