Holiday bells are ringing, and many consumers are sprinting to snag a year-end bargain on a new car or truck. Is that the smart move?
Experts say "yes," and that the deals are a bit better this December than a year ago. One difference: There are still 2019 cars and trucks on the lots that dealerships are motivated to sell at a discount.
"This is the time of year you'll find your better deal," said Matthew DeLorenzo, senior managing editor for Kelley Blue Book, which provides vehicle ratings, reviews and prices to consumers. He said dealers are looking to boost year-end sales numbers.
Ronald Montoya, senior consumer advice editor for Edmunds auto rating service, says December is when there are the highest discounts off the manufacturers' suggested retail price - 6.1% on average - and the best incentives. In January, there are usually smaller discounts, as dealers tend to start the year conservatively, he said.
A 2019 versus 2020 model
"Most of the deals going are on the outgoing models," Montoya said. He recommends looking at both 2019 and 2020 models. "It may not always be that the 2019 is the best price. It's worth looking at both of them," he said.
Here are some of the best year-end incentives to purchase or lease a new vehicle, according to AutoNation, the country's largest auto retailer, based in Fort Lauderdale; and Southeast Toyota, part of JM Family Enterprises in Deerfield Beach:
2019 Ram 1500 Big Horn Crew Cab pickup truck is on sale for up to $15,000 off the sticker price, or the truck can be leased for $199 a month plus tax.
A 2019 Nissan Altima or Rogue is $6,000 to $8,000 off the sticker price. And the 2019 Nissan Murano is up to $10,000 off the sticker price.
A 2019 Honda Civic LX Sedan CVT can be leased for $159 a month, plus taxes, for 36 months.
Toyota is offering a $500 holiday cash bonus on the purchase of eight models of the Corolla, Camry, RAV4, Highlander, Tacoma and Tundra; and $500 holiday bonus for leasing nine models of the Corolla, Camry, RAV4, Tacoma and Tundra. Also, 0% financing is available for 13 models including the Corolla, Prius, Camry, Avalon, C-HR, 4Runner, Tacoma, Tundra and Sequoia.
Manufacturers incentives' might include bonus cash, which should go directly to the consumer, and dealer cash, which is not advertised.
Dealers "don't have to pass that on. It's their choice," Montoya said. But to get you to buy now, a dealer may dangle that extra incentive.
Vehicle prices have been rising, with the average transaction for a light vehicle above $37,000, up nearly 4% in 2019, according to Kelley Blue Book. Expensive SUV and CUVs, or crossover utility vehicles, are driving up the average purchase.
"Cars have been getting more expensive because there's more technology on board," DeLorenzo said. There are also new safety, comfort and entertainment features on the latest vehicle models, AutoNation points out.
But sales have been slower in 2019 than in 2018, so deals are "a little better," he said.
Consumers are likely to find special offers on trucks, SUVs and crossover utility vehicles, which combine the smoother platform of a car with the body of an SUV.
Consumers are less likely to find incentives on sedans and minivans, he said. "Sedans are selling slowly so you would think there would be a lot of incentives on them. But manufacturers are pulling out [of the sedan market]," he said. Those who want sedans might find more lease deals, he added.
"Minivans had a drop in sales and there are slimmer incentives," DeLorenzo said. There's less motivation for manufacturers to offer incentives because "people who want those vehicles really need them," he said.
You have free articles remaining.
Experts advise to shop for a vehicle before the holidays so you can do your homework, visit dealerships, and check online sites for available models and prices.
Montoya said shop sooner, during the holiday season, than later. " Later, the discounts might be better but you may not have much to choose from," he said.
And decide whether you're flexible on the color of your new car, and if not, if you're willing to pay a bit more, he said.
DeLorenzo said consumers are often asked by online car-shopping sites to enter their zip code. While consumers may be hesitant to do so, for privacy reasons, that's often how to find a regional offer for a car or truck.
Once you have chosen a specific car or truck model, consider the financing deals being offered. Some loan companies offer 0% financing or cash back. If you can secure your own low financing through a credit union or bank, then you can take advantage of the cash back.
"The lower the payment, you have to look more closely at the terms. There could be a big upfront payment," DeLorenzo said.
Kelley Blue Book recommends consumers only lease a car when they're not planning to drive a lot of miles in a year. Offers are often tied to financing through a certain company, and leases may have mileage limitations.
The Ram 1500 lease offer is contingent on the buyer's "above average credit" and must be financed through Chrysler Capital Tier 1, for example.
The Honda CRV lease deal cited by AutoNation, for example, has a limitation of 10,000 miles a year. Over that, leasing will cost you 20 cents a mile.
Consider taking the cash back on a "low financing or cash back" offer, if you can secure your own low financing through a credit union or bank.
If you buy
Here are the top rated cars of 2020, based on performance, comfort, technology, fuel economy and value, according to Edmunds:
Sedan: Honda Accord
Luxury Sedan: Mercedes A-Class
Electric Vehicle: Tesla Model 3
SUV: Kia Telluride
Luxury SUV: Mercedes GLE
Sports Car: Chevrolet Corvette
Truck: Ram 1500
Visit the Sun Sentinel (Fort Lauderdale, Fla.) at www.sun-sentinel.com