If you’re looking for a deal on a new car, August may be the time to hit the dealerships. An analysis of new-car sales data by TrueCar shows average August prices as the lowest available throughout the year: about $169 lower than the average prices of any other month.
The analysis looked at new car and truck prices each month over the past five years, and August emerged as the clear time for bargain hunting, with the average new vehicle costing $29,296. December is commonly perceived as the time to get a good deal on a new car, because it seems like fewer people would venture out to car lots in the winter, and it’s the end of the year, but TrueCar’s data showed December had the most expensive average price: $31,146. That’s $1,850 more than new vehicle price tags in August, on average.
When You May Want to Buy a New Car
Dealers lower prices in August in an attempt to clear out older inventory, the TrueCar analysis found. In its report, TrueCar founder and CEO Scott Painter said consumer perceptions of the best time to buy new automobiles has changed as data on the industry has become more readily available, because rather than choosing when to shop based on conventional wisdom, consumers can make numbers-based decisions by looking at price-trend data.
Following August, in which a car buyer saves an average of $716 off the annual median new-vehicle price, July has the lowest average new-car prices.
How to Get a Good Deal on a Car
Timing is only one way to save money when purchasing a new vehicle. Consumers factor a variety of things into auto affordability, like gas mileage, the value of optional features and a variety of personal preferences, but one of the things that makes a big difference in the total cost of a new car is the buyer’s credit history.
If you’re financing the new vehicle, your credit score will have a large impact on how much that loan costs. The best interest rates are typically available only to buyers with the best credit, and the lower your credit score, the higher you can expect your interest rate to be. If your credit is in bad shape now, and you can put off buying a new car, you may want to consider delaying your purchase until you can improve your credit, despite the low prices available this month.
When you’re thinking about buying a new car, check your credit reports and scores to see if you can improve your standing before you fill out a loan application. You’ll also want to build up a fair amount of savings, because a smaller down payment often corresponds to higher loan rates. To see how your credit may affect the cost of your auto loan, you can look at two of your credit scores for free on Credit.com. Keep in mind you don’t know what scoring model your lender may use in evaluating your loan application, but by focusing on improving your basic credit behaviors, you’re more likely to boost your scores, no matter the model.
More on Auto Loans:
- Are There Car Loans for People With Bad Credit?
- What to Do If You Can’t Make Your Car Payments
- Top 5 Worst Car Buying Mistakes