Want to shave thousands off your next car purchase?
Black Friday and Cyber Monday have trained consumers to search for deals in the first week of December. The reality is most year-end savings are actually happening at car dealerships.
Here’s the truth…
It doesn’t matter if you’re shopping for a hybrid, petrol, performance or diesel – most consumers have no idea that end-of-year incentives are reaching insane levels, dealers are desperate and a simple new strategy makes December 2024 your best shot at end of lease or personal finance car buying.
Without exclusive intel, you’re overspending.
Prepare to discover:
- Why end-of-year car shopping is fundamentally different
- The 3 psychological reasons that December incentives are huge
- Secret dealer incentives you never hear about
- Hidden manufacturer clearance tactics for maximum savings
- The best categories of vehicles to focus on now
Why end-of-year car shopping is fundamentally different
Deciding to buy in December isn’t just about getting a good price.
It’s about market-timing when dealers and manufacturers are most vulnerable.
The two most critical months for auto retailers are December and January. Every year, failing to hit targets in these months often costs dealers their bonuses and manufacturers their targets.
Imagine it like this… A Subaru dealership handling performance models like the WRX for sale Brisbane knows that every unsold 2024 car sitting on their lot racks up interest charges. The longer those vehicles remain unsold, the more floor plan interest they have to pay to their financial institutions.
Combine this with manufacturer’s margin requirements that the typical new car consumer will never hear about and you get one of the most lucrative car shopping periods of the year.
The 3 psychological reasons that December incentives are huge
Imagine a car dealer without sales bonuses, manufacturer’s end of lease or personal finance car buying incentives or manufacturer allocations.
It doesn’t exist.
Dealer’s bonuses, finance offers and inventory are all tied to large companies outside their control that rely on human psychology.
Consumer psychology
During November and December, most people don’t buy new cars. This is normal as holiday shopping and travel fill up time.
Automotive market-share is a numbers game. When shoppers and lessees start shopping in January, they’re about 60% of the way through that month. By then, the competition is hard at work and they already have the sales numbers they need to hit targets.
Dealer psychology
Dealerships close 20%-30% of their sales volume in December and January. If they’ve got unmet quotas, each new sale brings real fear of a huge new year-end bonus.
They also lose out on significant manufacturer bonuses based on performance and allocation. If they underperform, they also take it out on customers by withholding incentives.
Manufacturer psychology
Manufacturers have huge quotas and offer incentives to dealers based on performance. They also manage their own quotas and offer incentives to dealers that hit targets.
This means both manufacturers and dealers are incentivised to use every trick in the book to make their numbers.
Secret dealer incentives you never hear about
Most people have seen the big window sticker incentives: loyalty, conquest, college graduate, financing, lease deals, cashback, etc.
The best deals are much more covert.
Here’s what’s going on behind closed doors:
If your loyalty program is telling you that deals are worse this year, it’s because your “conquest” number has gone up $500.
Manufacturers also offer secret dealer incentives to move their cars. Dealer cash, holdbacks, volume bonuses and stair-step programs are all major avenues of additional profit that dealers get to keep if they don’t pass on savings.
Don’t fall for “lifetime” loyalty or similar messaging, either.
Dealer and manufacturer incentives have been described in painful detail above and your salesperson isn’t going to volunteer that info.
Hidden manufacturer clearance tactics for maximum savings
Not only are dealers desperate to shift the 2024 and outgoing model year inventory, they know manufacturers are right behind them pushing the same thing.
Manufacturers are enacting clearance tactics that offer car buyers the best savings in a decade. The problem? Dealers aren’t training salespeople or negotiating properly to take advantage of them.
The key is understanding that:
Customer rebates on outgoing model years are being ratcheted way up. The number of unsold 2024 models is close to 1.5 million. Dealers will be under intense pressure to reduce inventory using manufacturer-supplied discounts.
Manufacturer financing is getting a significant assist to keep monthly payments from inflating out of range for most shoppers. Rebate money and easy APR offers are being combined with extended terms.
Lease programs are also being boosted by artificially high residual values. Don’t be surprised to see average price increases being used as fuel for more appealing, lower monthly lease payments.
The most underappreciated play are manufacturer conquest incentives, hidden programs designed to lure customers away from the competition.
According to industry data, U.S. auto sales finished 2024 at 16.0 million units, representing a 2.3% increase from 2023.
The best categories of vehicles to focus on now
End-of-year tactics aren’t even across the market.
Focus your attention on these areas:
Outgoing models. Any 2024 model that’s being replaced or significantly updated for 2025 is your best bet. These will be the cars that dealers most want to move, while manufacturers are also providing incentives.
Slow sellers. Vehicles that haven’t performed well for the brand often carry the biggest incentives. Slow-selling vehicles can come from any manufacturer.
Electrics and hybrids. They’re both getting an incentive assist as manufacturers and dealers work through changes to federal support and the evolution of automotive electrification.
Luxury. Premium vehicles often have higher profit margins, making more room for negotiation when the dealerships need to move inventory.
Timing your purchase for maximum savings
Timing is almost as critical as model choice in December.
Take advantage of:
Last week of December. You’ll see the highest incentives and best deal period starting December 20. Inventory is tight and service is likely to be rushed.
Week one and two. Get a better balance of model choice and discounts during the first two weeks of December.
First 2-3 days of January is a major no-go zone. Dealers reset their monthly quotas, manufacturers launch their first two 2025 incentive programs and urgency disappears.
Shop weekdays. You’ll get more attention on a Tuesday in December from salespeople and dealership managers.
Advanced negotiation tactics for year-end shopping
Year-end shopping isn’t an opportunity to test old negotiation skills.
You have to do things differently.
Start with this:
Inventory turnover. Use this counter-intuitive step as your starting point for negotiating. The longer a car sits on a dealership lot, the more it costs them. They’re happy to unload anything that’s 90+ days old.
OTD price not monthly payments. Never negotiate in terms of monthly payments as dealers try to hide profits by extending terms and steering you towards expensive options and warranties.
Search for multiple dealerships. The end of the year is when geographic pricing discrepancies are at their widest, so shopping around is more important than at other times of the year.
Wrapping it all up
The window for year-end automotive sales and deals is closing rapidly.
Winning buyers are the ones who realise that December and January aren’t random opportunities to get discounts, they’re the result of carefully orchestrated corporate incentives and performance requirements creating temporary opportunities for huge savings.
Your action plan:
Inventory research. Inventory levels change constantly at any given dealership. Check online inventory reports first to identify which models have been sitting longest.
Financing options. Always have one or more financing options prepared and get pre-approved with your bank or credit union before shopping to know what you qualify for and to counter dealer financing offers.
The final step is to be ready to act fast when you see the right deal and you’re in the market for it. Have your financing in place, trade-in value estimated and a shortlist of target vehicles in your sights before setting foot in a showroom
