One was usually lead to believe that the end of the month is the best time to buy a new car. Even though that can be true to a certain extent, but that is no longer necessarily true. Dealers thrive on meeting or exceeding their monthly quotas by receiving incentives and bonusses on a monthly basis from auto manufacturers. So by losing on a particular car just to meet their monthly total sales quota, they would receive a bonus for each car they sold for the month. So it is no brainer that the dealer would be willing to lose on a single car just to make it up with incentives for total cars sold that month. But sometimes if the dealer is way off in meeting their monthly sales quotas, and it does happen in bad times, they will not be willing to lose on any cars. And since nobody really knows about their quotas, it would be difficult to judge that. Only thing one can figure out is the dealer’s mood when one walks into the dealership. But that could be a waste of time hopping from one dealership to another to get the best deal.
Thanks to a ton of information on the internet, one can actually find information that could help you get the best deal if you are ready to make the purchase. One has to understand how auto dealers actually work. When you see hundreds of cars on a dealer lot, the dealer really does not own the cars by any means. Dealers fill their lots with “Floor Plan Financing” , which essentially means that dealers are really paying only interest on the loan of the cars on their lots. These loans are typically for 30 to 90 days, and that is why dealers have the incentive to sell the car as fast as possible. The longer the car remains on their lot, the more they pay interest on the car loan and less net profit there is on that particular car.
So why do dealers put up so much cars on their lots you ask? Well there is an opportunity cost of not having the model and color of the car that a customer would not be able to find on your lot, but on somebody else’s dealer lot. Plus if there is a particular car that another dealer is searching for their loyal customer, that dealer would like to keep their customer and willing to earn less on that deal just to keep that customer for service and future deals.
Fine, so how do you get that information? Well one of the best websites that provides that information is cargurus.com. If you know what you are looking from make to color and even down to certain features, you can search it and then use the listing category by the “Oldest listing first” instead of the “Lowest listing first” option. By doing so, you are looking at the car that has been sitting on the dealer’s lot for some time and is costing him money. He or she would be eager to get rid of it, just to move it out of their lot. The listing will tell you how long that particular car has been listed on cargurus.com and how many people even liked it by saving it. The dealer can see that information on their end of the platform and they know that savvy shoppers know about this information and so they will be willing to bargain within reason to unload the car off their lot.
Here is an example of 2020 Ford Escape search with blue color and other features:
Here is how you can make the best deal, and that is you make a list of all the options you have from different dealers, and shop at the end of the month too. By doing so, you are putting pressure on the dealer to unload that car because it has been sitting on their lot for more time than usual and there could be an incentive from the manufacturer for them if they unload it for their monthly sales quota. You could save yourself at least few hundred dollars more by following this procedure than if you went about shopping for the same car but not knowing how much the dealership just wants that car off their dealer lot!
You need to be prepared and be ready to make the purchase. You need to do your homework and you will be proud of yourself for saving extra few hundred dollars on a car that you could have overpaid for by not knowing these two secrets. Good Luck!