Why January Is The Best Time Of Year To Buy A Car

By Eric Rosenberg
Reviewed by: Lauren Bringle, AFC®
Published on: 12/23/2019

Buying a car is a major expense. There are many tips out there for negotiating, choosing and buying the right car, but the time of year you go car shopping could also have a major influence on the price. So what is the best month to buy a car? Our experts are here to answer all of your questions.

Is January a good time to buy a car? Yes! Here are some of the biggest reasons January is the best time to buy a car.

Score a deal on last year’s model

Though the model year traditionally rolls over in the fall, there's a strong mental association of a new calendar year. Any 2021 models still on the lot in January 2022 will need to get sold, and fast, if dealers want to make a profit on the car.

Dealers make the most money on the newest cars. If a car remains unsold more than a full year after its debut, buyers can expect huge savings off the sticker price when they go to the car dealership. Mike Rabkin, president of From Car to Finish, explains:

“Dealers will make short deals to hedge their bets and make sure they hit their quota. Additionally, there can be temporary dealer rebates to clear out a model year, so dealers can sell a vehicle for less when they have the use of said incentives.”

New cars come with an MSRP from a car dealer, or Manufacturer Suggested Retail Price. While brand new models will likely sell for a price at or close to MSRP, you can get a lower price at the car dealership as time goes on.

You should never pay more than MSRP when car shopping. If you get a good deal, you could pay well below the sticker price on the car when shopping at your auto dealer.

Dealers are hungry for sales in a typically slow month

The expensive holiday season in December generally leads to lower spending in the New Year. As bills roll in and holiday debt rears its ugly head, most households are not motivated to make a big purchase and often try to save money.

Retail analysts have long pinpointed January as the best month to buy major appliances, and the same rationale can inform strategic vehicle purchases at a car dealer.

Despite the fact that January is a slow consumer spending month, retailers, including car dealerships, still have to make money. Because of this, vehicles occupy a buyers' market, with car salesmen salespeople eager to close deals and meet their monthly sales quota. This rationale applies to all winter months - not just January - with great deals on cars also available in February and early March. If you are on the market to buy a new car, you may want to head to your local dealership during these winter months.

If you are specifically in the market for a car with warm-weather features, the cold months are a great time to buy. The previous month’s end-of-year clearances also create good deals for expensive vehicles.

Bigger deals on luxury vehicles

The trends that inform January as a slow retail month apply even more to luxury cars. With spending flat, the most expensive vehicles become the hardest to move. This is when you can expect car prices to be at their lowest at your local dealership.

“Typically when supplies are low, only higher-priced models are left over,” says Melissa Granke of OhioCarGirl. “The less equipped vehicles sell faster since they’re less expensive.”

As car dealers slash prices to meet their end-of-year quotas, consumers snap up the cheapest cars first. Come January, it's the luxury cars that become the leftovers. If you’re shopping for a new vehicle come January, you can often expect a better deal compared to other months.

So if you wait too long to buy a car that month, you could miss out on the lower-priced deals. As you can see, January really is the best time of year to buy a car.

Financing is part of the price

When I bought a car in mid-2019, my wife and I were able to leverage our excellent credit scores to get an unbeatable offer for a car loan. We accepted a car loan from Toyota for 60 months with 0% APR. That’s right! We just divided the final of our new minivan by 60 to get our monthly payment.

With good credit, you would likely get a decent auto loan offer through a dealership, but it might not be the best deal you’ll find.

“Try credit unions, regional banks or community banks, and always negotiate,” says Harrine Freeman, financial expert and CEO of H.E. Freeman Enterprises. “Leverage your current bank relationship and ask for perks such as discounts on an auto loan for automatic payments.”

If you have bad credit or no credit, it might be a good idea to hold off on the car purchase while you learn how to build credit. If you are able to wait, good credit can save you a lot on a loan.

Money-saving tips for buying a car in January or any other month

If you plan to take advantage of the special incentives that January offers to car buyers, you may as well utilize additional strategies to save even more money. The time of week and month can make a big difference when shopping for a new vehicle.

Weekends tend to be busier at car lots, and busy sales managers are less likely to give you the lowest price. Likewise, you may find more amenable salespeople at the end of the day, as opposed to the morning or early afternoon.

Sales commissions are usually based on monthly quotas. Going in at the end of the month when everyone is working to meet their sales goals can give you an edge when negotiating a better price, and sometimes lead to deep discounts.

Other great times of the year to buy a car

Although January is a great time to buy a car, there are many other times of the year where you can save on purchasing a vehicle. Generally speaking, many experts recommend getting a new car at the end of a month or quarter. These times are typically when most deals are available.

Here are some other suggested times to buy a car:
End of the car’s model year
End of the car’s life cycle
Around a holiday (4th of July, Labor Day, Black Friday, Presidents Day)

Save on a car any time of the year

Car shoppers should always come to the dealership prepared. The more research and planning you do ahead of time, the better. No matter what better model or new feature you find, don’t go over your budget or spend more than you can afford. And leverage your credit to save on financing.

Leasing is generally a bad financial decision compared to buying cars, but your credit score affects car leasing as well. The numbers work a bit differently to lease a car behind the scenes, but you may be able to save on a lease with some of the strategies above.

Buy or lease though, a new car is even better when you get it at an amazing price — in January or any time of the year.

About the author

Eric Rosenberg is a former bank manager and corporate finance worker with a Bachelor’s degree and MBA in finance. See Eric on Linkedin and Twitter.

About the reviewer

Lauren Bringle is an Accredited Financial Counselor® with Self Financial– a financial technology company with a mission to help people build credit and savings. See Lauren on Linkedin and Twitter.

self logo
Written on December 23, 2019
Self is a venture-backed startup that helps people build credit and savings.

Disclaimer: Self does not provide financial advice. The content on this page provides general consumer information and is not intended for legal, financial, or regulatory guidance. The content presented does not reflect the view of the Issuing Banks. Although this information may include references to third-party resources or content, Self does not endorse or guarantee the accuracy of this third-party information. The Credit Builder Account, secured Self Visa® Credit Card, and Level Credit/Rent Track links are advertisements for Self products. Please consider the date of publishing for Self’s original content and any affiliated content to best understand their contexts.

Take control of your credit today.

White company logo

Build credit. Build dreams.

Get started