The Best Time to Buy a Car is...

Online Car Buying Tips

According to experts at Kelley Blue Book and Edmunds, the biggest discounts offered by auto makers and dealers are found in the months of December, March and January, in that order. So if you miss getting that big red bow this Christmas, the outlook is still favorable.

The pandemic-era chip shortage that disrupted the automotive industry has largely eased in 2024. Semiconductor output has improved significantly, allowing automakers to stabilize production and rebuild inventories. As a result, both new and used car prices have dropped in 2024, continuing a trend that began in late 2023. Used car prices fell by about 14% this year, and new car prices dropped by about 7%. Despite these declines, prices for both new and used vehicles are still higher than pre-pandemic levels, partly due to inflation and high interest rates.

The new year always brings new models and designs, so dealers may be anxious to clear out their inventory of the older models to make room for new stock. Buying last year's model at a discounted price can be a win-win for you and the dealer. You'll see manufacturers touting 2026 models as early as the summer of 2025.

Used cars continue to be in high demand, but as mentioned earlier, those prices are falling. If you're in the market for a new car, having a used model to sell or trade in puts you in a better position, at least in the short term.

How to Research (and maybe even buy) Your Car Online

Most people would rather go to a dentist than a car dealership. If you hate the high pressure sales people, the backroom negotiations with the invisible but all-powerful “finance manager,” the last-minute up-sales of extended warranties, undercoatings, floor mats, etc., then you may want to get as much of your car buying done online as you can. The good news is, you actually can buy a car without setting foot in a dealership.

There are plenty of potential gotchas when purchasing a car. But arming yourself with knowledge will help you avoid getting taken for the proverbial ride. For most, the first step toward car-buying is to visit your bank or credit union. Get pre-approved for a loan so you know how much you can afford to pay in total and per month. Then stick to that budget no matter what. (Tip: credit unions typically offer much better car loan terms than banks, and it’s easy to join one.)

A favorite line from dealers is "How much do you want to spend on your monthly car payment?" My advice is to tell them they have it backwards! First, you negotiate the price of the car. Then your monthly payment is simply the price divided by the number of monthly installments. If you start with the monthly payment, you'll always end up paying more than you should.

You should steer clear of any seller that refuses to provide essential details like VIN, inspection reports, or a clear maintenance history. Check the condition of the tires on a used car, and ask for new ones if they appear to be well-worn. Find out when routine maintenance, such as oil changes, filters and brakes were last done.

If you plan to pay cash, don’t let that secret out of the bag until price negotiations are complete. Dealers make more money when you finance a car, and they may factor that into their price calculations.

Next, do your research, all of which can be done online. Edmunds.com is one of the best places to start; the highly respected Edmunds has refined its proprietary method of estimating actual sales prices of thousands of new and used cars since 1966. Edmunds also published detailed reports on the reliability, maintenance needs, and insurance costs of specific car models. Consumer Reports New and Used Car Reviews & Ratings is another comprehensive, trustworthy resource.

When you have the field narrowed down to a few makes and models, it’s time to get a feel for market prices and your trade-in value. Edmunds is great, as I’ve mentioned. So is Kelley Blue Book. J.D. Power is another popular pricing tool.

Getting a Price Quote

Now that you have a feel for what your potential car(s) should cost, you can get actual price quotes from a number of websites. CarsDirect will help you find the right car at the right price and then connect you to the Internet sales department of the dealer who has the deal. CarGurus is a useful tool for both new and used car purchases. CarGurus rates each deal on a scale of "great" to "overpriced" and factors in both price and dealer reputation to rank deals.

One of my favorites is TrueCar.com because you can find out in advance all the dealer costs that are tacked on to the sticker price. While viewing a car of interest, click the "Get Your True Price" button, and enter your email and phone number. (If you want to remain anonymous, you can use a fake email and phone.) Click the Confirm Availability button, then scroll down to see the Price Summary section. Some dealers charge only a modest Document Fee of $200 or so. Others pile on a VIN Etching Fee, Reconditioning Fee, Processing Fee, Closing Fee and other miscellaneous fees, which can significantly bump up the price. I've seen cases where the dealer fees added up to more than $7000!

By the way, you should NEVER pay for VIN etching, which inscribes the car's VIN on the window glass. Dealers may tell you it's a security feature that will help recover a car if it's ever stolen. But you can buy a do-it-yourself VIN etching kit for about $25 if you really want that done. You should consider ALL fees to be negotiable, except the title/registration fee, which is required by your state.

The American Automobile Association (AAA) has an Auto Buying Program that offers to help members "get a great deal on a new or pre-owned vehicle, while avoiding the stress and hassles normally associated with buying or leasing a car." AAA refers members to participating dealers that agree to provide low, pre-set, no-haggle pricing. There's no cost for AAA members. USAA - the United Services Automobile Association - has catered to military personnel and their familes with auto loans and insurance since 1922.

It may surprise you to learn that Costco has a car-buying program that moves several hundred thousand vehicles per year, including motorcycles, boats, and RVs.

Carvana pioneered the Car Vending Machine concept, but they also offer a service that lets you buy a car completely online and have it delivered to your door. You can also visit one of their locations in person, in Atlanta, Nashville, Charlotte, Houston, Austin, San Antonio, Orlando, Philadelphia, Indianapolis, Kansas City, Memphis, and several other cities.

So you can see there are several ways you can actually close a deal at a firm price without ever setting foot on a car lot. But if you prefer to buy in-person (and many do), you can approach local dealers with the best deals you found online and see if they’ll match prices. Don't be afraid to walk out the door if the salesperson won't accept your offer, or if he tries that annoying "how much do you want to pay per month" line. As I mentioned above, negotiate your best price, and then divide by the number of months in the terms of the loan. That's your monthly payment, and it should be the LAST thing you agree on, not the starting point.

Avoid Car Buying Scams

Buying a used car from a private seller can save money; Edmunds reports actual sales prices for dealers and private sellers; the latter are often significantly lower for the same car specs (make, model, year, condition, mileage, etc.). But scams are common in private auto sales, so stay on your toes.

I have a friend who has bought several used cars on eBay or Craigslist, sight unseen. He does tons of research, asks lots of questions, and has even traveled over 1500 miles to close the deal. Amazingly, it's worked out well for him, but I can't recommend doing it that way.

My advice is always, ALWAYS take a private seller’s car to a mechanic of your choosing, not his, for a pre-purchase inspection. If the seller won’t agree to that, keep looking. And never take cash to a stranger’s home - or worse, a remote “storage lot” - to pay for a car. Likewise, don’t wire money to anyone. Meet in a well-lit public place, preferably where video cameras are rolling. Some police stations actually encourage people to meet in a designated part of their parking lots for transactions like this.

Ask the seller for the VIN number and get your own car history report from CARFAX or AutoCheck. Don’t try to save a few bucks by accepting the seller’s report - it may belong to a different vehicle, with the VIN number altered. The car history report should show accident history, as well as the number of previous owners.

Pay attention to the maintenance history. It should show both date and odometer reading for each incident. If the odometer has been fraudulently rolled back, you'll be able to spot the discrepancy there.

Beware of stolen vehicles. The National Insurance Crime Bureau offers a free VIN check to see if a vehicle has been reported stolen and not recovered. Also demand to see the owner’s driver’s license and registration; make sure the owner’s name is on both and that he looks like who he says he is.

Finally, a few tips about making payment. Use a secure, trackable payment method. If the seller demands a deposit via untraceable methods like cryptocurrency, wire transfer, or gift cards, back away fast. And use only reputable escrow services if you're buying online. Scammers are known to create fake escrow accounts to steal money under the guise of "secure transactions."

Buying a car may never be fun; it’s a confusing, stressful, high-stakes game. But with online resources, much of the pain and a lot of travel time can be eliminated. Your thoughts on this topic are welcome. Post your comment or question below…