3 Reasons Why Now Is the Perfect Time to Buy a New Car

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Last updated Dec 12, 2023

Let’s clear the air right off the bat. December is the best time to buy a car if you’re in the market for one. At CarEdge, we’re all about doing what’s smart for your wallet. Even with the best offers in years, and prices slowly falling, it continues to make the most sense to keep driving the vehicle you have. But for those pondering buying now or holding off until 2024, here are three reasons why December is the car buying month you’ve been waiting for.

#1: Inventory Is at a 2-Year High

As we usher in December 2023, new-vehicle inventories have soared to levels not seen since spring 2021, marking a significant turnaround. Cox Automotive reports a robust 70-day supply of vehicles as we step into the month, a stark contrast to the inventory drought experienced just a year ago. New car inventory in America, now at about 2.5 million vehicles, has seen an additional increase of 100,000 in November alone.

This surge represents a gain of 890,000 vehicles compared to the previous year, and the highest new car inventory since the early months of 2021. Before the COVID-19 pandemic, new car inventory levels typically hovered between 3 million and 4 million vehicles in the U.S. The past year’s recovery, particularly evident from summer 2022, marks a pivotal shift in the availability of new vehicles for consumers.

Inventory has reached a 2-year high just as OEMs approach the new year, a time when they’re eager to sell 2023 model year vehicles to make way for incoming 2024s. This inventory rebound is a promising sign for buyers. When inventory rises, deals and incentives are sure to follow. And right on cue, massive deals are here

See the Most and Least Negotiable New Cars Today

#2: Financing Costs Will Rise in 2024

federal funds rate over time

The cost of financing a car purchase hasn’t been this high since the late 1990s. In December, the average new car loan finance rate is 9.96% APR. Used car loan rates are even higher, nearing 14% APR. 

Following the Federal Reserve’s recent decision to maintain the federal funds rate between 5.25 to 5.5 percent, many are wondering if we’re done with rate hikes. This marks the third time in the last four meetings that the Fed has opted for rate stability, despite having raised rates a total of 11 times in this economic cycle to counter high inflation.

However, the question looms: how will new car financing costs change in 2024? The answer lies in the word ‘incentives’. 

As we enter the peak of December’s year-end car sales, automakers are rolling out their best financing offers of the year. But with borrowing costs at near 20-year highs, these attractive incentives from OEM’s captive lenders are likely to vanish come early January. Automakers aren’t offering low APR deals because they want to, they’re doing it because they need to sell cars before the new year arrives.

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It’s becoming clear that interest rates will hardly budge in 2024. The median of financial industry’s projections predicts that the Federal Funds Rate at 5.1% at the end of 2024, representing just one 25 basis point interest rate cut for all of next year. 

In other words, December 2023 will feature more low-APR offers than we should expect to see until this time next year. The generous 0% APR to 1.9% APR deals from brands like Mazda and Hyundai are expected to be short-lived. 

In the new year, new car shoppers should expect more 3.9% to 4.9% APR offers, and far fewer zero percent financing incentives.

#3: Year-End Deals Are Here, and They’re Massive

the best time to buy a car is December 2023. year-end sales are here!

This December, car buyers are presented with a rare opportunity: securing low-interest rates through manufacturer incentives, complemented by some exceptionally lucrative cash offers and great lease deals. The increasing cost of borrowing is driving automakers and dealerships to entice buyers with more attractive financing options, even as these rising rates add to the pressure on dealerships to offload their inventory.

December Lease Deals

Automakers don’t mind leasing their new car inventory one bit. When a car is leased, a third-party financer takes ownership of the vehicle, so the car dealer and automaker still get the benefit of ‘selling’ the car.

In December, there are some truly amazing lease offers. Here are a few of the standout lease deals this month:

See ALL of the best lease offers in December

The Return of Zero Percent Financing

Mazda CX-5 year end sales

Leading the charge with zero percent financing on select models are automakers like Mazda, Nissan, and Hyundai. Once a staple in the auto market, 0% APR deals have become a rarity in today’s high-interest rate climate. Not far behind are brands like Kia, Honda, and several Mazda models, offering enticing 0.9% APR deals. Plus, there are’s an abundance of 1.9% APR offers from General Motors, including for the Silverado 1500.

This array of year-end sales provides an unmatched opportunity for car buyers looking for value in a turbulent market. 

Explore all the best year-end car sales here.

If You’re Planning to Buy, the Time Is Now

At CarEdge, December is the month we’ve all been waiting for. The combination of high inventories, appealing year-end deals, and the likelihood of returning to high financing rates creates a unique window for securing a great deal on a new vehicle. 

Ready to approach car buying with behind-the-scenes market insights? Try CarEdge Data for local price and inventory updates in real-time. CarEdge Data equips you with negotiation leverage like never before!

Free Car Buying Help Is Here

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Ready to outsmart the dealerships? Download your 100% free car buying cheat sheets today. From negotiating a deal to leasing a car the smart way, it’s all available for instant download. Get your cheat sheets today!

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