The time of year can have a big influence on used car prices. Just like the real estate market, there are certain months that favor buyers vs. sellers. Let’s look at some of the factors to help you make smart used car buying decisions.
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Used Car Costs Facts Or Myths?
There’s a lot of speculation that goes on about the seasonality of used car prices. For example, some believe that around Christmas or school graduation a lot of people are looking for new cars as gifts. Other logic points towards tax season as refund checks can go towards a downpayment. Some even claim that right before hunting season, a lot of truck sales occur. While all of this may be true, specific months statistically favor used car buyers.
Used Car Seasonal Price Trends
Many used car dealers put a higher price on a vehicle then gradually drop the price. Car dealers actually drop the price of used cars on an average of 1.32 times per month. According to MoJo Motors, the price drops most frequently between the months of July and October. In general, summer is car buying season, and dealers tend to drop prices more as the summer unfolds. Once summer ends, extra stock needs to be unloaded, so price discounts continue until the early fall.
Tax Refund Time
A large number of people begin to get their tax return checks in February. And, yes, many use this for a downpayment on a car purchase. This is one reason why you won’t see as many price reductions on used cars in February.
Year End Surge
Once the slow fall season is over, dealerships begin to sell more aggressively and this continues through the end of the year. In some cases this is because they want to close the year out with good numbers, and in other cases they just need to get cars off their lots before the end of the year. The holiday shopping mood probably plays a role here as well.
Other Helpful Tips
In general, the end of the month or quarter might give used car buyers an advantage. During these times, salespeople want to meet their quotas before the next month’s cycle begins. The same might even apply for the time of day. If you make a late hour offer, a used car dealer might give in just to close one more deal before heading home.
Before you buy any used car, make sure you inspect it thoroughly first. If you can’t inspect it yourself, you can get a professional car inspection service to do it for you. Even if you can check out the vehicle yourself, qualified auto inspections make sure you don’t miss any important defects.
Get a qualified pre-purchase auto inspection before you buy used. Contact CARCHEX today to get a used car inspection report sent directly to your Email.
Published in CARCHEX Vehicle Inspection Resources by CARCHEX on July 28, 2015