Whether you are watching your favorite cable channel, over-the-air TV station or listening to any form of radio that runs commercial advertising, you have probably noticed an marked increase in the number of ads touting “End of the Year Savings” or “End of the Summer Sales” or “End of the Year Sales.” Each of these ads promises some sort of savings or extra savings “to move them, 2013 leftover cars and slow-moving 2014 vehicles, off the lot.”
Confusing Time of Year?
You can be forgiven if you are a little more than confused about the best time to be in the market. For years, the conventional wisdom said that the end of the calendar year, when business is slow due to the holidays and weather, was the best time to shop shop for a new car.
Now, it turns out that the end of the year is the second-best time for automotive bargains, according to www.TrueCar.com researchers. It is the end of the summer when you get the best deals of the year.
Summer's end and the year's end are the major milestones of the automotive year. There are, along the way to each, other times where you can expect good deals. They include:
The end of the month
The end of the quarter
The midpoint of the year
Then, there are the sudden, you-have-to-be-in-the-right-place-at-the-right-time spots where an act of nature slows or stalls a dealership's business. It might be rain, snow, ice or fog or any combination. That they work for the consumer is beyond question, but, it's still a matter of luck for you.
Granted, some of these weather phenomena can be predicted. For example, snow or a general ice storm can be picked up in advance. If you get to the dealership at the right time, you can find significant savings. The reason for this is that the dealership has to justify staying open and keeping people in the office. If there's no business, there's no reason to keep the doors open, however, dealers do keep their doors open in all kinds of crazy weather, even if there's no traffic on the floor.
As soon as you show up, you'll find you are treated royally and, if you have a price in mind that's fair, even though it might be quite a distance from the price the dealer would normally expect, it's likely you will get it. Or, at least, you will get a decent discount and deal.
Weather Helps Out
Does the weather tactic work? Yes, as we have seen ourselves at several dealerships. During one ice storm about 15 years ago, a used-car showroom/sales office where one worked there were four appointments set and sold in one afternoon. During the “test drives” – really abbreviated tours around the lot due to the ice – the buyers managed to keep from sliding into other vehicles and then came back and we sat down and crunched numbers and the deals the customers received were excellent. The main showroom, by the way, had, as we remember, one or two sales for the whole day.
Holidays also work like weather and since you know when they will be you plan your shopping around them. If the holiday falls at the end of a week that also happens to be the end of a quarter, you will really hit pay dirt as this is the time when dealers have to close the books and it is also the time their new rankings in their sales unit are listed. If they make or surpass their commitments the dealership will be rewarded with a better position versus other dealers in their grouping. Plus, the dealership will find that its allocation requests for more cars of a particular type is filled fully and may even include one or two more. Other, poorer performing dealership will find their position drops and the percentage of slow-sellers will be delivered on next delivery day.
Signs of the Event
At this point, you likely have two more questions:
Is this a real or is it just advertising?
How do you get in on it and when does it start?
To answer the first question, yes it is real and not just advertising! And to answer the second, all you need to do is watch TV or read any ad mailers and look at the calendar.
If you are hearing about great “Deal Days” or “Special Sales Days” around Labor Day, then you can be sure that's the time.
And, while the ads imply that there's a cutoff, you will find more “sales” planned during the week or next weekend as this usually continues for the month of September, well past Labor Day.
The Why Behind the When
A key indicator of the exact point where dealers will likely start to move on price is actually something dealers cannot control because it is a factory statistic. It is the “average days inventory” of unsold cars sitting outside the factory waiting for good homes. That is released by the factory to dealers, along with factory expectations for the month or quarter. Dealers are also told of any special incentives that may be included to help sell slow-movers (these cars are usually not quite what anyone is looking for, at the moment but they have to move).
Next, Part II: Doing the Deal