Is There A Best Time To Buy A Car?
When is the best time to buy a new car? Or the best time to buy a used car? And what’s the best time to lease a car?
These questions have surely crossed every money-conscious car buyer’s mind. Also, for some of us (myself included), there’s no peace of mind until the answers are uncovered.
But what really is the best time to pull the trigger and lock-in the very best deals? And if you ask most car dealerships the answer will more than likely be today – right now!
- When to buy a new car?
- And, when to buy a used car?
- Or, when to buy a certified pre-owned car?
- Plus, when to lease a new car?
“…the misconception would be the end of the month, end of the year, end of/end of, but I think that’s kind of what the dealers want you to think.”
Some will swear the best time to buy a car is at the end of the month. While others will say the best time to buy a car is the end of the quarter. Then again, another camp will suggest the best time to buy a car and get good deals is the end of the month, quarter and year!
Conversely, others will say the spring/summer holidays or the autumn/winter holidays are the best time to buy a car.
As if car buying wasn’t already stressful enough- d’Oh! So here’s yet another factor to add to the overall car buying equation – when?
Lucky for us my pal Lewis Cook from Martin Chevrolet agreed to share more car dealer secrets!
In this podcast, Lewis takes us behind the scenes to answer the question, when is the best time to buy a car? And as you’ll find out the answer is different depending on what you’re buying – and many other factors. But it’s all here!
Click play to listen to this podcast and pick up all the pearls of car-buying wisdom Lewis shares with us. This is some seriously awesome stuff. Take notes. Or just print this page because the entire transcript from our talk is below!
When Is The Best Time To Purchase Your Next Car?
Lewis: I think the misconception would be the end of the month, end of the year, end of/end of, but I think that’s kind of what the dealers want you to think. We, for the most part, play on that misconception.
Specifically, in the used car world, I think the trick would be for the consumer to be patient.
“…this is going to be relevant to the listeners for sure and I think you’ll be a little bit shocked…”
What happens in the new car world is we don’t have to pay interest on these cars for the first three or four months.
“…we have these misconceptions—I call them misconceptions—may be President’s Day is better, maybe Memorial Day is better, is it the end of the month or is it the beginning of the month—what is the better time to buy the car? I always go back to just be educated.”
I think if you have that partner in your corner, that’s going to help you through that buying process. It doesn’t really matter when you’re buying the car.
Car Dealer Secrets Revealed On When Is The Best Time To Buy
Tom: Welcome to iDriveSoCal, the podcast. All about mobility from the automotive capital of the United States, Southern California. Tom Smith here and I am joined by my good pal, Mr. Lewis Cook, here at Martin Chevrolet on Hawthorne Boulevard in Torrance, California.
Thank you so much for joining me yet again.
Lewis: My pleasure. Sorry to be giggling in your spectacular intro. One of the best intros on the market, I think.
Tom: [Laughs] Thank you.
Lewis: Yeah, I couldn’t do it that well, for sure.
Tom: Thank you. Well, as I shared before, you know, we keep costs low.
Lewis: What are you talking about? This table is plastic. I mean, the tablecloth is clean. [Laughs]
Tom: [Laughs] I wear a lot of hats, including the—well, the host, but then also what do you call it?
Lewis: Preproduction, postproduction?
Tom: Yeah, yeah. I do it all.
Tom: I wear a lot of hats. So, this podcast is about—and I’m excited to do this one.
Lewis: That’s so funny.
Tom: [Laughs] I mean, I love—hey, I love cars. I love buying new cars. I love getting a new car.
Lewis: You know, I guess this is going to be relevant to the listeners for sure and I think you’ll be a little bit shocked about what we—
Tom: What you’re going to share?
Behind The Scenes With Martin Chevrolet’s Boss – Lewis Cook
Tom: And if you haven’t listened to a podcast that Lewis and I have done in the past, please do so. There’s some great buying information that Lewis shares.
Lewis is a long-time general manager, again, here at Martin Chevrolet in Torrance, California, but he’s been in the business for a long time and he shoots very, very straight. He gives us information that most don’t.
You share new stuff with me that I don’t—we just did a podcast on lease return, end of lease return, and I learned a couple of very significant tidbits that are going to help me in my next leases.
Lewis: I’m just waiting for my colleagues to get a hold of it and calling me like, “What, the…”
Tom: Why are you sharing this stuff? [Laughs]
“…I’m just waiting for my colleagues to get a hold of it and calling me like, “What, the… STOP IT!”
Lewis: [Laughs] STOP IT!
Tom: Okay. This one is the best time to buy. When do I pull the trigger on buying a car? And whether you’re buying new, leasing, buying used, buying a CPO vehicle, through a CPO program, it doesn’t matter.
Lewis: No, it does.
Tom: All those—
Tom: We need to break all that stuff down?
Lewis: Did I just throw a wrench in your…
Tom: Well, yeah, hey. We got plenty of time to—it’s a podcast.
Lewis: We’ve never been short-winded, that’s for sure.
Tom: [Laughs] Okay, so let’s take it from there. That already throws off my plan. As you said, don’t even plan, just go and do it.
Lewis: I just try to throw him off, that’s all I do. That’s my goal.
When To Purchase Depends On What You’re Buying
Tom: Your very first comment, there is a difference when it comes to time to buy in buying or leasing or buying new or certified preowned? Or used or certified pre-owned (CPO)?
Lewis: Correct. New and certified preowned specifically, for sure. I mean, it’s going to be based on the market. I think the misconception would be the end of the month, end of the year, end of/end of, but I think that’s kind of what the dealers want you to think. We, for the most part, play on that misconception.
Lewis: In the used car world—
“You just said the consumer’s perception is the end of the month, end of the year is a good time to pull the trigger, to buy, whether it’s new or certified preowned and that’s a misconception that the dealer’s play to.”
Tom: Let me reiterate that because that was significant, and it’s my perception. You just said the consumer’s perception is the end of the month, end of the year is a good time to pull the trigger, to buy, whether it’s new or CPO and that’s a misconception that the dealer’s play to.
Lewis: Or is it?
Tom: That’s what you said. [Laughs]
Lewis: [Laughs] This is all going to come full circle, I promise. Well, the reason I say, “Or is it?” is if it is a misconception or hey, if it is a conception, then perception is a reality, right?
The End Of The Month Can Be A Factor When Buying
Lewis: Even though we’re playing on it in businesses and getting better at the end of the month because we’re playing on it, maybe there are some better deals to be had. Right?
Tom: Okay. Yeah.
Lewis: See my point?
Lewis: We’ll get back to that. Specifically, between a new car and pre-owned certified, that’s not a monthly deal there where it’s better at any one time of the month to buy. So, in the used car world, I think the trick would be for the consumer to be patient.
“Specifically, in the used car world, I think the trick would be for the consumer to be patient.”
On the dealer level, what happens in our preowned inventory or certified inventory, obviously it’s a depreciating asset as a business owner or somebody that has money invested in depreciating assets. The best thing to do is to get rid of them as fast as possible. Because if you don’t, they’re depreciating.
Consider How Car Dealers Price Their Inventory When Deciding the Best Time to Buy
What will happen is, is like the—my model in pricing is price high to start, right? Get the most potential to make the most money.
And as the car, we call, ages, on your lot, you’re going to start reducing that price. That age could be at its max the first week of the month, the second week of the month, the third week of the month, it doesn’t really matter.
There are lots of cool little widgets if you go to some of these sites, like Edmunds and Kelly Blue Book and whatnot, that you can actually watch the car. When there’s a price reduction, they’re going to alert you.
“As these [pre-ownded] cars get aged on the dealer’s lots, it’s kind of ingrained in our heads to get rid of the inventory as fast as you can and the longer it’s here, the lower the price…”
Lewis: And as that car ages on the dealer’s inventory—and when I say ages, it doesn’t mean that it’s a bad car or there’s something wrong with it.
Tom: It just might not be the right fit for that market, that particular dealer.
Lewis: Or that particular customer.
Lewis: As these cars get aged on the dealer’s lots, it’s kind of ingrained in our heads to get rid of the inventory as fast as you can and the longer it’s here, the lower the price, the faster you get rid of it.
Tom: The longer it’s here, the most it costs you, right?
Dealers Look At New And Pre-Owned Cars Differently
Lewis: Yeah, absolutely. Not so much as a new car. A preowned car doesn’t cost you because we own those cars.
There’s no loan, per se, on them, whereas on a new car, there is a loan on them. Basically, we have 15 to almost $20 million in inventory right now. Nobody is going to put up that kind of money just to have cars sitting on the lot. There’s a process for that. Basically, there’s a loan on them.
“…in the used car world, that’s not the case. We just want to turn it as fast as possible. As that car gets older in the inventory, the prices are going to get lower.”
But in the used car world, that’s not the case. We just want to turn it as fast as possible. As that car gets older in the inventory, the prices are going to get lower.
Tom: Now, as the car gets older, that’s for everything or just one of the categories?
Lewis: Well, I think specifically used, it’s very relevant. It does come into play on new cars and we’ll talk about that when we get to the new car part of it. But for used, it’s a big part of the—
Tom: Okay. When buying new, the best time to buy is—
Lewis: I haven’t talked about new yet.
Tom: I’m sorry, I meant to say used. I said it right in my head.
Lewis: That’s the most important part, except to your listeners.
Tom: What do you mean you don’t understand what I’m saying? I said it perfectly in my head. It just came out of my mouth wrong.
Guidelines For When The Best Time to Buy Is – Pre-Owned & Certified Pre-Owned
So, when buying used or preowned—not necessarily CPO, right? Or certified preowned as well?
Lewis: Preowned is preowned. Certified, yeah, it doesn’t matter.
Tom: So, whether it’s certified pre-owned or pre-owned, you’re buying pre-owned or CPO, know what you want, identify what you want. Probably be flexible, I think would be another idea worth considering. But then the guideline is the best time is really, be patient and wait until you see that price drop a bit.
Lewis: Watch. Yes, exactly. There are all kinds of other things along with that, too. Know what the market value of the car is, know what the car’s worth, and that’s going to give you, obviously, some more leverage when you come in to buy, because nobody wants to pay more than what it’s worth.
- Above all be patient and wait for price drops.
- But know the market demand, supply, and value for what you want.
- Because you could lose out to someone else buying your car.
- Be flexible with what you want.
- Consider expanding your color, feature and trim options.
- If you cannot be flexible then…
- Be ready to travel an extended distance to track down exactly what you want.
- Pro-Tip – Work with a dealer you can trust. A dealer that will treat you fairly and have your back with any issues.
- Tell them what you want and let them go to work finding it for you. That’s what they do!
Tom: Now, which do you want to tackle next?
For New Cars – When Is The Best Time To Buy Works Differently
Lewis: Well, on the flip side of that, there would be new cars and it’s a little bit of the same philosophies there.
What happens in the new car world is we get basically the first three or four months for free, as far as we don’t have to pay interest on these cars for the first three or four months.
Tom: From the factory.
Lewis: From the factory. It’s the same but almost flipped. The sooner we get rid of a new car, the better for us because then we’re not going to ever pay interest on the car.
“…in the new car world is we get basically the first three or four months for free, as far as we don’t have to pay interest on these cars for the first three or four months.”
Lewis: It’s kind of a good rule thumb, but there’s really no way for the general public or customers to know that.
With new cars, or I guess new or preowned, we have these misconceptions—I call them misconceptions—may be President’s Day is better, maybe Memorial Day is better, is it the end of the month or is it the beginning of the month—what is the better time to buy the car? I always go back to just be educated. It is somewhat of a misconception.
Here’s the deal: My cost never changes.
Tom: Never changes?
Lewis: Never changes. The cost, what I owe on a car for, that doesn’t change. What changes are the factories, the deals.
Automakers Typically Drive The Big Sales “Events”
Now, there are some factories that get really aggressive because of that perception that these times of the year are better to buy a car, so they’ll get really aggressive and in the Chevy world, they get super aggressive in December. Every December, they’ve come out with this deal where you pay what we pay. I don’t know if you’ve heard—
Tom: The employee pricing.
Lewis: Yeah, right.
Tom: They’ve had that since cash for clunkers way back when, ’08, ’09, something like that.
“Every December, they’ve come out with this deal where you pay what we pay. I don’t know if you’ve heard— employee pricing… Now, can you get that price today, right now? Of course, you can. Is it better to buy it? I mean, I guess, maybe easier is the word.”
Lewis: Right. Chevy does that specifically in December, so it is better to buy kind of at that time because you’re getting that price and it’s out there, the factory puts it out there in the universe, so that’s what we do.
Now, can you get that price today, right now? Of course, you can. Is it better to buy it? I mean, I guess, maybe easier is the word.
The ‘Big Sales Event’ Misconception On When To Buy A Car
Lewis: Because… so in December, in the Chevy world, everybody knows it’s “you pay what we pay,” so the customer is coming in, “Hey, we pay what you pay,” “Okay, here you go, here’s what we pay, here’s the deal.” We make a deal, we move on.
Right now, you can come in here and you can still get that price, but if you don’t know you can, so it’s easier because everybody knows about it.
Tom: Right, right.
“Right now, you can come in here and you can still get that price, but if you don’t know you can, so it’s easier [in December] because everybody knows about it.”
Lewis: If you walk in and you’re—
Tom: If you’re listening to the iDriveSoCal podcast and specifically the direction of Mr. Lewis Cook from here at Martin Chevrolet, you can get that same end of year deal.
Lewis: Any day.
Tom: Any day.
Tom: Especially here at Martin Chevrolet. I’m going to give you guys a plug, an additional plug there, as I should.
But that’s interesting, because me, as a consumer, you know, I love cars, I love getting a new car. The buying process, as we’ve discussed, and everybody knows, is—can be very painful. In the past it has been. And I mean, you put your consumer hat on, right?
Tom: When you have to buy cars for your family.
Lewis: When you have to.
Tuning Out Of ‘Big Sales Event’ Ads
Tom: But I’ve been desensitized to the hype on TV commercials and a little bit of radio commercials, but primarily TV commercials.
I’ll look at the car and appreciate the new car and I like the commercials that show the new product coming out.
But when it gets to the deals, it’s like—it’s almost the equivalent of back when the internet first came around and people used to say, “www dot” before every URL, or when social media got big, “Follow us on this or like us on this.”
It’s almost like I just tune that out.
I guess I’m smart to tune that out because the reality is, I can get those deals anytime?
Buy When The Time Is Best For You – From A Dealer You Can Trust
Lewis: Yeah. I mean, the end of the year might not be the best time for you to buy, right?
Tom: You mean for me personally?
Lewis: Yeah, for you personally. The podcast listener personally.
December might not be convenient and because it’s not convenient, you might be costing yourself more money doing it in December, even though you think you’re getting a better deal, right? Perse.
You might not have enough equity in your car. You might not have enough down payment or whatever the case may be.
We tend to pull all that business forward in December. Everything happens at once.
Tom: And then you sleep through the first quarter of the next year?
Lewis: Unfortunately, yeah. Pretty much.
Tom: And I mean, that’s due to what the manufacturer does that, right? I mean, it’s not you.
Automakers Want To Tell You When The Best Time To Buy
Lewis: Specifically, Chevy. I mean, a lot of manufacturers will come out at the end of the year, “This is the end of year sale.”
But if you think about it, they’re doing it all the time. I mean, it’s constantly happening. Exactly what you’re tuning out is happening every day.
It’s not just happening at the end of the year. It’s just a different message and it’s perceived differently because people are anticipating it.
They don’t anticipate it during the year so it’s not… You can get a deal on a Chevy truck, a Silverado truck right now, if you wanted to buy a Chevy Silverado, you can get a better deal right now than any other time.
Even towards the end of the year, just because, for instance, they’re going through this build-out from ’18 to ’19. It’s a new body style and there’s a lot of promoting going on. So, now is the time to do that. It’s not the same with every other model.
What About the Big Holiday Sales Events?
Tom: We just kind of covered the President’s Day, Memorial Day, 4th of July, Labor Day weekend, Black Friday, New Year’s Eve/end of the year.
Lewis: It’s all the same as the end of the year. Yeah, you can group all that together, right?
It’s the perception that the dealers are doing better deals and it doesn’t mean that we are, per se, but that’s like I said, perception is the reality.
If that’s what the customer thinks is happening, okay.
Tom: Right, right.
Lewis: I’m not going to disagree.
Model Year End And The Best Time To Buy – Extreme Example
Tom: Then I want to get to—well, I’m going to skip over something and then get to this, what you just got to. You hear the end of the model year. First off, what does that mean?
Lewis: Well, end of the model year is just typically anytime that, you know, you have a 2018 and those are phased out and now the 2019 is here. It’s been a little bit different every year that I’ve been in the business as far as what we have in inventory.
“…a local customer of ours, paid like $27,000 off sticker… that’s excessive, for an example, but that’s probably the best end of model year example that you’re going to get.”
When I got here, we still had 2017s in stock and I got here in 2018. Right now, here we are mid-2019, I have one 2018 left. Everything else in my inventory is a 2019.
Can you get a better deal right now on that 2018 that I have one left of than the 2019? Absolutely. Absolutely. Believe it or not, we just sold our last 2017 Corvette yesterday.
Tom: That was a good-looking Corvette, too.
Lewis: It was a very nice Corvette.
Tom: I would’ve never guessed that was a ’17. I would’ve thought it was a ’19.
Lewis: Yeah. It’s $125,000 car.
Tom: Oh, there you go.
Aging Inventory Can Create Great Opportunities
Lewis: So, it cost me $5-600 a month every month it’s here. It’s not a good situation for that car to be here for so long.
That gentleman, he’s a local customer of ours, paid like $27,000 off sticker. That’s the probably best end of the model year—I mean, that’s excessive, for an example, but that’s probably the best end of model year example that you’re going to get.
He paid—if you looked up Kelly Blue Book on this car and said it’s a preowned car, he’s paying less than retail. Kelly Blue Book as a preowned car, and it’s a new car with 0 miles on it. He knows he got a steal and he was very grateful. I’m not going to pay the $800 in interest and flooring on the car this month and it’s off the books and it’s done with.
Tom: It’s a win for everybody.
Tom: [Laughs] Sorry, pal.
Lewis: Losing $20,000 is technically not a—I wouldn’t call that a win. But it’s the cost of doing business that I was anticipating, so, I mean, it doesn’t hurt that bad.
Being Local Can Be A Factor When Car Buying
Tom: And you did it with, as you said, a local customer who is going to appreciate it.
Lewis: Yeah, in the reality of it is, is I am more apt to do that with a local customer, too.
I mean, that’s a pretty good segue into another aspect of this that you probably don’t even have in your prepared notes.
Tom: [Laughs] I laugh because we had a discussion before the mics went hot about how much to prepare and just shoot from the hip. Yeah, anyway. My prepared notes, right?
Lewis: Yeah. But what I didn’t have in there. What was I saying? [Laughs] I guess if it was in my notes, I wouldn’t have asked that question, right?
Tom: [Laughs] You were saying what I didn’t have in my prepared notes and it was another thing and we were talking about in the context of the customer, the local customer that just got that.
Lewis: Local, thank you. Wow. Okay, so you proved your point. I won’t ever make fun of you for having notes again.
So, if a local—if somebody comes in here that’s a local and we’re negotiating a deal and then I have another customer here that’s say from San Diego, this business is customer acquisition business.
Service Can Be A Factor When Buying A Car
That’s how I like to put it. And we’re acquiring customers for one purpose and that purpose is to maintain their cars.
The service department is definitely more of a profit center than the retail sales department, right?
So, if you’re from San Diego and you’re here in Torrance and you’re trying to buy a car, what’s my incentive? I’m never going to see you again.
Lewis: Am I going to straight out lose money to buy a—to sell you a car? Without having the opportunity to, you know, to gain that money back.
Whereas a local customer, if I have to take a little bit of loss—and I know that the listeners are like, this guy’s talking about losing money on cars. Yeah, dealers don’t lose money.
Well, unfortunately, we do and that’s why I call it an acquisition business because the money you make is on the flip side, right?
In the service department, the customers are coming in and they’re servicing the vehicles and there’s money to be made there.
So, am I more apt to give this local customer that I’m going to see all the time and they’re going to tell their family, and everything is local and keep it in my PMA, as they call it?
Tom: Primary market area.
Service That Entices Buyers To Go The Extra Mile(s)
Lewis: Yeah, doing air quotes there. Of course, I’m going to give probably—sway more to giving him a better deal.
If they’re asking me for this deal and another customer asks me for the deal and I’m never going to see them again, I’m probably going to—I’m more apt to say yes to the local customer.
Tom: I want to jump in on that though because you point out a scenario where it would keep—it’s good for you and anybody that lives around your store because you operate that way.
You’re legit, you set the bar high for everybody else.
Now, that San Diego customer might have a bunch of Chevy dealers around them—not saying that they do—or put somebody else anywhere.
My nearest dealer for the car that I want to get, might not necessarily be somebody that I want to buy from and go back to.
So, in that sense, from the customer’s perspective, I might drive—and actually, I had a service advisor that I loved that I drove 20 miles extra to go see that service advisor.
Lewis: We have that a lot here, actually. There’s a lot of customers that will drive to come to our service department.
Where Can Impact The Best Time To Purchase
Tom: I know you’re on a roll there, but I wanted to point that out because it’s a selling point of Martin Chevrolet, for sure, that sets you guys apart from the rest and in some cases, it’s worth that extra drive.
Lewis: Yeah. I mean, the reality of it is, I mean, we try to treat customers a little bit differently, so I think the experience—well, I know the experience will be better here than anywhere else.
If that’s what you’re after, then absolutely. But for the subject of the right time or place to buy a car—
Tom: When to buy.
Lewis: Yeah, when to buy a car, I think that the locality needs to be mentioned, for sure.
Tom: Yeah. I get where you’re coming from, how—
Lewis: I guess that really has nothing to do with when.
Tom: It’s a factor though.
Lewis: Right. It is a factor.
Tom: It is a factor. So, that covers the model year. Now, another thing that you mentioned that we kind of transitioned to a few minutes back, you mentioned Silverados. I think it was Silverados.
Lewis: Silverados, because of the year-end, the new body style.
All-New Models And The Best Time To Buy A Car
Tom: The new body style. Now, is that going to be all-new or is it going to be a refresh?
Lewis: All new.
Tom: All new?
Lewis: Yeah. This is all new. The ’18 and ’19 is a completely different body style.
Tom: Okay. So, with that in mind, let’s talk about that a little bit from a timing perspective. If the ’19 is an all-new body style—which it is, actually, I know this, I already did a vehicle review on ’19 Silverado and I loved it.
Lewis: I bet you’re just testing me.
Tom: No, no, no. [Laughs] I’m so focused on this one, on this podcast that we’re doing right now, I had to remember that I’d actually already done that.
You’re saying that you still have a couple of ‘18s leftover or you’re out of ‘18s?
Lewis: I’d say I don’t have ‘18s in stock in the Silverado lineup. We have a Suburban, but no ’18 Silverados. I think what you’re getting at—and correct me if I’m wrong—is it better to buy an ’18 than a ’19?
Tom: Well, if someone is—obviously there’s cons and pros to going both ways, right?
I’m not getting the ’19 and all the new bells and whistles and design that the ’19 has to offer. But, in that transitionary period, there’s something to be said about going with the former design.
The former generation, so to speak, because they’ve already gone through that life cycle of that generation in the vehicle and they got everything right. There’s not going to be any phantom bugs or anything to really worry about.
When To Buy A Car – Also Depends On Your Preferences
Lewis: They’re not coming out with technology right now that’s going to create any more new phantom bugs, I don’t think. I think with that, is it comes down to, with the consumer, the preference of the look. I mean, that’s kind of the society we live in.
Lewis: What looks better the ’19 or the ’18?
Tom: Especially here.
Lewis: Yeah. And if right now you decide that the ’18 looks better, you’re probably going to get a better deal.
Because, as I said, dealerships are going to—they may have had that ’18 in their inventory for a while. They’re going to want to get rid of it, stop paying the flooring fees and whatnot and the manufacturer knows that.
The manufacturer tries to support us, and they understand that we pay these flooring costs on cars as they age on our lot. They’ll put more incentives out there to help us move those.
Then, of course, it’s in their best interest for us to move the older models anyway because as the new stuff comes out, then it’s more relevant.
Does the Day Of The Week Matter? Nah. But Last Day Of The Month Could
Tom: So, day of the week, day of the month, end of the quarter, end of the year—well, we talked about the end of the year already.
But those other ones, day of the week, day of the—because if you do a Google search…
Even some of these credible websites that offer valuations that we’ve mentioned earlier in this podcast and other podcasts, they have little sidebars that say, “Oh, well, hey, this day, buy on Monday because of the weekend has just gone by.” That sounds like absurd based on the—
Lewis: No, I guess it’s not totally absurd.
“…the end of the calendar month for a manufacturer may not be the 30th. It may be, typically they’ll go with the next Monday…”
As far as the day of the week, I mean, I don’t know if you really want to buy into any of that, per se. However, I will give some credit to the day of the month. But I think it goes back to—again, remember, the same deal can happen any time of the month, any day of the month.
But I think it goes back to that perception, right? So, it’s the end of the month and it depends on the situation the dealer is in.
I mean, I’ll be honest, I’ve been at the end of the month where I’m, you know, 10, 15 cars away from my quota. It’s the last day of the month. We’re going around asking employees if they want to buy cars at that point. At that point sometimes.
But if you think about it, if you come in and I’m 10 cars away—let me back up a little bit.
A Dealer’s Bonuses On Sales Can Impact When To Buy A Car
Specifically, for us and that last day of the month and missing that 10 cars and the quota thing, it goes back to Chevy incentivizes the dealership in volume and they set a number ahead of time, it’s called a bogie. If you hit that bogie, you get X-amount of dollars back. That’s the simplest way to put it.
Tom: They refer to that as the back-end, or in layman’s terms, could you say that?
Lewis: I mean, I think the back-end would be more towards like financing and stuff like that in the car world. But we call it other income.
We do take a loss on cars, we touched on that, and it’s a reality, but we get this money back from the factory.
If we’re taking losses on cars in anticipation of getting this money back from the factory as a volume bonus, let’s say, then if I’m not going to do that, if that’s not going to happen, then we’re going to be in trouble.
Here’s the last day of the month, we’re 10 cars away from this volume bonus. It could be a substantial amount of money that may be coming our way if we hit this bonus, yeah, the deals are going to get better.
But Not Every Factory Offers Their Dealers Volume Bonuses
That may play into your last day of the month. The end of the month, the end of the calendar month for a manufacturer may not be the 30th.
It may be, typically they’ll go with the next Monday or whatnot. So, that plays into your end of the month deal where yeah, of course, in that situation, you know, I’m at the customer’s mercy for the most part because I have to sell these 10 cars.
I have to get this number, and there it is.
I think that’s where that comes from. Not every manufacturer is like that and let me tell you, Chevy is one of the only—General Motors is one of the only manufacturers like that.
A lot of the different manufacturers I’ve worked for, that’s not the case. There is no volume bonuses and whatnot. They pay a little bit different.
Tom: Gotcha. Okay. Am I missing anything about the when? It feels like we’ve covered it pretty extensively, but based on that expression I just got, I might be missing something. Either I’m missing something, or we’ve beat it to death. I’m not sure, which one is it?
When To Buy A New Car Always Changes
Lewis: Yeah, no. I don’t know. I think it’s all relevant. It’s a hard topic to touch on because it’s forever changing.
I mean, I might not have that volume bonus this month and maybe next month, so it may be the end of the month, it may not be the end of the month. Listen, not to sound like I’m giving a plug for myself or—
Tom: Go ahead, do it!
Lewis: You know, it comes back to relationships.
Knowing who you’re buying for, having that trust in them and knowing that they’re going to do the right thing by you.
Because we have that power. I think if you have that partner in your corner, that’s going to help you through that buying process. It doesn’t really matter when you’re buying the car.
But, to your point, there is some relevancy when it comes to certain factors in the industry that can play into that.
You just got to know when that is. Honestly, it’s going to be tough between all these different manufacturers because they’re all different.
So, is there a rule of thumb? Not really. Do all those play out in some fashion? Absolutely. Does that even make any sense? Probably not.
Ultimately It Depends On What You’re Buying
Tom: It does if you’ve listened to the entire podcast. [Laughs] It absolutely does.
If you were to say one, two or three key takeaways in a short sentence, or the headline, what’s the headline takeaway? Is it patience? Or, is it knowing what you want and not being in a rush?
Is it a combination of things?
Lewis: I think it’s a combination. So, I think it’s a combination of a lot of things. I think knowledge is power.
I think a partnership with somebody that’s going to be there for you throughout the whole buying process is key.
You can back it into a lot of different things as far as the day of the week and day of the year and all that kind of stuff. It’s all relevant.
I think if you have somebody that wants to earn your business again and again and again, they’re going to take care of you and that’s really the bottom line there.
All these manufacturers are going to put some money into holidays and there’s always going to be some hype somewhere.
When To Buy A New Car – Summarizing The Many Factors
- Typically dealers have possession of new cars for three or four months before having to pay interest:
- But there’s no way for you (or I, the general public) to know that timing with certainty.
- However, a transparent car dealer that you can trust should share this info.
- ‘Big Sales’ events can be misconceived:
- That’s when everyone will likely to take action.
- The timing of that sale may, or may not, be good timing for you.
- A transparent new car dealer, that you can trust, should provide the same great deal year-round.
- Model year-end can create great opportunities:
- When a vehicle is being replaced by it’s next ‘generation’ – deals can be available.
- Being local can be important to car dealers:
- Being local means you’re likely to bring your car back for service.
- And that can entice dealers to work a bit harder with you on price.
- Day of the week doesn’t matter as much as the end of the month – sometimes.
- That’s because of some carmakers end of month bonuses they give to dealers that reach their quota.
- Pro-Tip – Find a transparent dealer you can trust. Dealers are people too. Be honest with them and demand the same.
- Start the conversation with what you’re looking for.
- Let them know what you’ve learned about their business from iDriveSoCal.
- All dealers should respect your knowledge and want to help further educate you.
And of course, when it comes to new Chevrolet’s, Martin Chevy is who we highly recommend.
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Buy When You Are Ready
Lewis: We’re all trying to find that way to create the hype and I mean, you can play into it and buy with the crowds and wait for finance, or you know, you can just come to Martin Chevrolet and I’ll just give you that deal any day of the week. [Laughs]
I didn’t even answer your question, I’m pretty sure.
Tom: No, no, you did. Always good stuff. Thank you, as always, for the behind-the-scenes info, the behind-the-scenes look, if I can say that, on an audio podcast.
Anything to add before we wrap this one up?
Lewis: No, I’m good.
Martin Chevrolet on Hawthorne Blvd in Torrance, California
Tom: Mr. Lewis Cook, right here at Martin Chevrolet, come to say hello to him. His entire crew, Ronnie Blomquist [phonetic] is his general sales manager and one of these two head managers are pretty much always at the store.
Lewis: Yeah, one of us is always here, for sure.
Tom: And available to answer questions, meet people, and make sure that you are taken care of.
Thank you so much again for all the info, for the partnership.
Lewis: Always a pleasure.
Tom: The pleasure is mine, my friend. We will do it again, soon.
Thank you for listening. For iDriveSoCal, I am Tom Smith. We will talk to you soon.
Lewis: See ya.
2020 Chevrolet Reviews:
2019 Chevy Reviews: