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You’ve heard us say it before, and you’ll hear us say it again; December is the best month to buy a new or used vehicle. End of year sales promotions are typically the most aggressive of the year, dealerships are determined to hit their month-end, quarter-end, and year-end volume-based sales objectives, and manufacturer’s budget their largest share of dollars to go towards December marketing activities. December is the best month to buy a car, truck, or SUV, but that doesn’t necessarily mean every “deal” on a dealers lot is a good one.
This year we commissioned our first ever CarEdge research project, the 2020 Negotiability Report. With our data partner MarketCheck, we analyzed nearly 2 million vehicle listing pages to determine which vehicles dealers should be desperate to sell in the ten largest cities, and Detroit (because if it has to do with automotive, then you have to include Detroit, it’s a rule).
The results were interesting. It’s incredibly clear that there is an oversupply of some vehicles in certain areas, while there is a lack of supply in others. Take for example in the Chicago, IL region. We found that half of the most negotiable new cars in Chicago are Audi’s. Could that have something to do with the fact that there are 7 Audi dealerships in the city, and maybe that is causing a bit of an oversupply? Sure. What does that mean for you if you’re in that area? Go get yourself a great deal on an Audi!
The methodology for this research project was simple. Just like we have a Negotiability Score in the CarEdge app, we calculated the same score across all vehicles in each of the eleven regions to determine what their score is. We then ranked the top ten for new and used in each region. If you’re unfamiliar with the Negotiability Score, it is a 0 to 100 score we assign to any vehicle identification number (VIN), and it is calculated by analyzing a vehicle’s “time on lot” (how long it has been listed for sale by a dealership), and the local area’s market days supply (an industry metric to determine how “in demand” a vehicle is).
Are there really “Black Friday car deals?” Each year it seems the Black Friday tradition has started earlier and earlier, with retailers having Black Friday promotions a week before Thanksgiving even happens. What happens this year amidst the global pandemic is anyone’s best guess.
That being said, automakers have tried for years to drum up sales during any holiday, and Black Friday is no exception. You don’t have to look too far to find automaker’s promoting their incentives and offers this holiday season.
This begs the question though, should you take one of these Black Friday car deals, or are you better off waiting until the end of the year to make your car purchase? 2020 is an atypical year for many reasons, and with new and used car prices swinging dramatically over the past few months, it is hard to say when prices will be best for car buyers.
Black Friday car deals vs. end of year car deals
When it comes to negotiating the best car deal possible, there are two major factors to consider; what manufacturer incentives are, and how likely the dealer is to negotiate on their inventory. If you’re thinking about getting a Black Friday car deal, then you need to understand how both are influenced at this time of year.
Manufacturer incentives
Within the automotive industry it is well known that end of year sales promotions are typically the strongest of the year. Why? Because most manufacturers are publicly traded companies, and they have to report their earnings quarterly to their shareholders. Even though a lot of manufacturers run on a “fiscal calendar” instead of the traditional calendar year, there is still a lot of weight put into “end of year” numbers, and inevitably thousands upon thousands of corporate employee bonuses are dependent on hitting certain targets.
As we’ve talked about in other guides here on the CarEdge website, automotive manufacturers are not afraid of a little fraud to hit their annual goals.
That being said, this isn’t the preferred path to hit sales figures, and believe it or not, automakers prefer to steeply discount their vehicles to sell them to consumers before they fake the fact that they were sold! Novel concept, eh?
Foureyes, a dealership sales enablement software company, has great insight into manufacturer specific discounting. If you visit this page (https://lps.foureyes.io/auto-pricing-trends) you’ll see original equipment manufacturer (OEM) specific discount percentages broken down by model year.
Our recommendation is that you look at this data daily as you’re actively navigating the car buying process. You may not qualify for all of the manufacturer’s incentives, however you can at least time your purchase to align with when they are most aggressive. For most OEMs that will be the end of the year, not Black Friday. The notion that there are Black Friday car deals is really more of a marketing gimmick than actuality.
Dealer negotiations
When are car dealers most likely to negotiate a fair car deal? Black friday, or at the end of the year? The answer to this question is highly variable, and every dealership will be different, but as a rule of thumb, most car dealers will be more likely to negotiate with you on price at the end of the calendar year.
As we’ve talked about in other full-length guides, car dealerships don’t make the bulk of their money from selling cars; they make it from factory incentives when they hit volume goals. There is no time where manufacturer incentives mean more than at the end of the year. Dealership’s can have hundreds of thousands of dollars on the line come December 31st, and a few more car deals could push them over the edge to secure those bonuses.
That being said, dealerships have monthly incentives from their manufacturers as well, and those incentives certainly are in place during the month of November. That’s why it’s impossible to say for certain that every dealer will be more likely to negotiate on price in December vs. November—it depends on where they are in each month relative to their volume based incentives.
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With all that in mind, it is important to remember that the basics of negotiating a car deal do not change. If you’re looking to get the best price possible, you’ll want to focus your efforts on vehicles that have been sitting on dealer’s lots for a long time. Just remember that you can always use our Negotiability Score as a guide for which vehicles dealers are more and less likely to negotiate on.
What are the best Black Friday car deals for 2020?
This section of our Black Friday car deals guide is solely focused on manufacturer incentives. Like we discussed above, dealer discounts are going to be dependent on each individual dealership’s interest in negotiating with you. Again, that is primarily driven by how close they are to their monthly volume sales goal, and how long a specific vehicle has been on their lot.
Many manufacturers, such as Kia, Mazda, Toyota, and more are still offering zero percent financing options. We strongly recommend that you consider these manufacturer financing incentives (if you qualify).
Aside from finance incentives, the manufacturer cash incentives are steep for some vehicles, but nothing too spectacular. If you’re in the market for a Nissan Leaf there are cash incentives up to $6,000. 2020 GMC Sierra 1500 has a $6,000 cash incentive as well, and if you’re in the market for a 2020 Chevy Bolt EV, there are $8,500 in cash incentives on the table.
General car buying tips for 2020
We recently wrote about a CarEdge community member named Clark, who purchased his Jeep Wrangler a few weeks ago. Clark’s story is a great example of navigating the car buying process in 2020, and especially amidst the ongoing Coronavirus pandemic.
Yes, your focus may be on getting the best Black Friday car deals, however it’s important to be like Clark, and understand big-picture trends in the automotive industry before you step foot in a dealership (or more likely email them).
Because of the Coronavirus pandemic, used car inventory has been in short supply. If you tune in to our weekly show on YouTube, you know that used car prices have been sky high (but are finally coming back down), and that new car manufacturing was nearly eliminated earlier this year, leading to supply constraints at dealerships right now.
All that being said, know that “knowledge is power,” and that being knowledgeable about the market conditions (especially in 2020 when things are as crazy as they have been), can save you thousands of dollars when you eventually do go to buy your car.
“How to buy a car 101” should be a mandatory course taught in high schools throughout the United States. It’s incredible that modern day car buying is as aggravating, infuriating, and convoluted as it is, but that doesn’t mean every car shopper shouldn’t know the basics of how to buy a car.
Everyday we receive hundreds of emails from CarEdge members. Many of the emails are success stories about how we’ve helped with our Market Price Report, Deal School e-course, and guides. It puts a huge smile on our face to know that we are helping thousands of people navigate the car buying process more effectively and efficiently.
Just the other day we received an email from a gentleman named Clark. Clark bought a used 2017 Jeep Wrangler with 17,635 miles, and he shared his entire purchase process with us (step-by-step) from start to finish. Clark knows how to buy a car, and we thought we’d take his experience, which he documented and shared with us, as a case study that you can follow when you go to buy your next car.
To protect Clark’s privacy we’ve removed his personally identifiable information from any screenshots. Keep in mind that every resource or tool we recommend in this case study is 100% free.
Without further ado, let’s dive in.
Understand market trends
One of the things Clark did that we highly recommend all car buyers do, is he researched trends in the automotive industry before contacting any dealers. Of course you want to get a great deal when you buy your next car, but what if the supply of vehicles is incredibly short right now, and no matter how impressive your negotiating skills are, car dealers simply won’t budge? What if the inverse is true, what if you know that the industry currently has a surplus of inventory, and that dealers are desperate for you to come in and buy a car.
In which scenario do you think you’ll get a better car deal?
Don’t be intimidated by the idea that you’ll need to scour the web looking for industry insights into inventory levels … We have you covered.
Want to make car buying easy? Let us do the hard stuff! It’s like Honey, but for buying cars, trucks, and SUVs. Sign Up For Free
Many research organizations exist that provide weekly and monthly updates on auto industry trends. Unfortunately these resources are only marketed towards industry professionals (which makes sense). That doesn’t mean you can’t access the same information.
Each week we publish a “Market Update” on the CarEdge YouTube channel. These 10-15 minute videos walk you through the high-level trends occurring in the auto industry this week. We pull our data from a few sources:
Our recommendation would be you either watch our weekly Market Update, or you refer to the three resources linked above. Either way, you’ll have a great sense for where the retail automotive market stands week in and week out.
Clark did this, and it was the perfect first step in his car buying process.
Run a Market Price Report
Once you have an understanding of the current market conditions, we recommend you zero in on market conditions for the specific vehicle (year, make, model, and trim) that you’re considering buying in your geographic area.
Our free Market Price Report is a great resource to do this, and that’s what Clark used.
You will use the Market Price Report in a two-pronged approach. First, to help you understand market conditions for the specific vehicle you’re interested in, and second to help you negotiate the best out-the-door price possible.
When we analyzed the overall market conditions (in the step above), we learned about inventory levels for the automotive industry as a whole. Now, with the Market Price Report, we’ll look at inventory levels for the specific vehicle we’re interested in for our geographic region.
You can see there are 6 similar Jeep Wranglers in my area. The average amount of time they have been on dealer’s lots is 44 days. Either using the map, or the table, I can see there is another Wrangler within 100 miles of my location that has a higher Negotiability Score. The Negotiability Score is a calculation that takes into account days on lot and market conditions.
As a car buyer, I can now see that there aren’t that many Jeep Wranglers in my area, so negotiating a once in a lifetime car deal may not be realistic. That’s okay, this is why we analyze the Market Price Report, to set realistic expectations.
This is exactly what Clark did. From his email to me, Clark said, “I ran 24 different Jeeps through your tool. I narrowed it down to 7 that I liked. I chose to start with the one I bought because I felt like I had the most negotiating power.”
And that is exactly what the Market Price Report is intended for; to help you focus your attention on the best option in your area!
I told you, “How to buy a car 101” really should be a course they teach in all high schools across America!!
Focus on a specific vehicle
After reviewing local market conditions with the Market Price Report, you’ll want to turn your attention towards focusing in on a vehicle or two to negotiate with the car dealer. How do you choose which one to focus on? We recommend you use our Negotiability Score as an indicator for which you should focus on (the higher the score, the better). That’s what Clark did.
Clark knew the days on lot for the specific vehicle, the market conditions in his geographic area, and was ready to contact the dealer to negotiate the out-the-door price. He did something that we highly recommend as well, which is to get a copy of the CarFax before going too deep into the sales process.
We also recommend (although Clark did not do this) getting a pre-purchase inspection on any used vehicle you purchase. It’s a relatively small investment that gives you the peace of mind to know that the car you’re buying isn’t a clunker.
Once those two steps are complete you can then contact the dealer to negotiate the out-the-door price of the vehicle. From Clark, “Long story short After talking about the black book numbers and COVID situation I made an offer of $28,000 + TTL. They came back with an offer of $28,164 + $300 dollar fee for a total of $28,464. Just at what your Dad suggested. (see offer sheet attached)”
Be pre-approved for financing before you go to the car dealership
Most car salespeople are trained to ask you how you plan to pay for your purchase, cash, finance, or lease. Our advice is to say you’re open to financing through the dealership if their rates are competitive (unless of course you don’t plan to do that).
That being said, you should absolutely secure pre-approved financing from your local bank or credit union before going to the car dealership. That’s exactly what Clark did, “I was pre-approved through my credit union at 3.19% (60Mo) …”
Then Clark did what we recommend all car buyers do; he gave the dealer a chance to beat his pre-approved rate:
“I gave them (the dealer) a chance to beat that which they did at 3.05% (60Mo).”
That is a textbook example of how to negotiate with a car dealership. That is how to buy a car 101!
The car buying checklists we’ve created below are meant to help guide you during your car buying journey. If only buying a car was a simple and easy task … We all know it isn’t. Use the car buying checklist below to make sure you do your due diligence before spending tens of thousands of dollars.
We plan to add more checklists to this page over time. If you have a suggestion for a checklist, please let us know in the comments below. Since you are here, we think you may also be interested in these other free car buying resources:
Purchasing a vehicle is no easy task. One way to make the process a bit more confidence inspiring is to get a Carfax on a used vehicle to better understand it’s history. That begs the question though, how reliable is a Carfax report?
Carfax, and their primary competitor, AutoCheck are the industry standard when it comes to vehicle history reports. These companies have built networks of data providers that allow them to compile the most comprehensive history report on any given vehicle.
Although these companies work diligently to capture as much information as possible, they are not able to get their hands on everything. This is where Carfax and AutoCheck can run into issues. Their data feeds aren’t real time, and not every dealer, repair shop, or vehicle owner reports back to them. Worst of all, occasionally people will do nefarious things so that their Carfax report doesn’t show accurate information.
Let’s review how Carfax works and explore what you need to know before you purchase a used car. Without further ado, let’s dive in.
Carfax reliability: only as good as the data they receive
I can assure you that at least once in my 43 year career in the car business I “fat fingered” a key or two when entering information about a car into an online system. Unfortunately this happens more than we’d like to admit, and the end result is that companies like Carfax end up with information from dealers that isn’t always accurate.
The saying “garbage in, garbage out” couldn’t be more true when it comes to Carfax and their business model. Carfax entirely relies on their network of dealers, mechanics, and service centers to provide accurate information about vehicles. Unfortunately, that means relying on human beings that are busy and overworked to get things right 100% of the time.
The Carfax website boasts that they have “112,000 different sources” of data, which is truly incredible, and is what makes them the industry standard for vehicle history reports. As a car buyer, you simply need to be aware that the way Carfax captures data from the 112,000 sources is generally dependent on a human being entering information correctly. If you see a Carfax report where the odometer read 2,500 miles on 10/10/18, and then 5,200 miles on 10/11/18, you can be fairly certain it’s a typo. This doesn’t mean Carfax is bad (not at all), it simply means you should diligently review the data you see on a Carfax report to make sure it is logical and seemingly accurate.
Data is not realtime, there is a delay
One of the biggest frustrations we hear from CarEdge readers is that Carfax reports frequently “miss” recent accidents or other similar activities. This is 100% true, since Carfax is not “real time.”
As you know, Carfax relies on it’s network of thousands of data providers to share information with them. Information about an accident that happened yesterday may not appear on a vehicle’s Carfax until next week. Unfortunately there is latency between when an activity occurs, and when Carfax becomes aware of it.
This is why it is extremely important that you have a pre-purchase inspection completed on any used vehicle you are considering purchasing. The pre-purchase inspection will shed light on any issues the vehicle has that may not have been reported to Carfax yet.
Although Carfax is the industry standard for vehicle history reports, and they do have an incredible network of participating data providers, you need to understand that not everyone reports everything to Carfax.
Here’s a great example … Rental car fleets. Rental car companies are generally self-insured, which means that when a rental car is in an accident the rental car company’s in-house insurance agency handles the claim. This in-house insurance company may not report to Carfax, whereas all of the traditional consumer insurance agencies do. What happens to that VINs Carfax when the repair was never shared with Carfax? Well, nothing, because Carfax isn’t aware of it.
This happens more often than you’d like to think, and it further reinforces the need to get a pre-purchase inspection completed before a purchase. Another common example is when a vehicle is serviced at a small “mom and pop” mechanics shop that is not part of Carfax’s network. You may see a Carfax report that shows no vehicle service records for years, however it is likely that Carfax simply wasn’t collecting data from the auto shop where that owner was taking their vehicle.
Can you trust a Carfax report?
So how reliable is a Carfax report? It’s the best vehicle history report you’ll be able to get your hands on, and in that regard, it’s very important you review it before purchasing a vehicle. Is it the “end all be all” for your purchase? No, that’s where the pre-purchase inspection comes into play again. Should you check other sources for vehicle history information? Absolutely.
One of our favorite tactics to dig up even more information about a vehicle’s history is to call your insurance carrier and give them the VIN of a vehicle you are interested in purchasing. The insurance agency may have access to other information that you do not see on the Carfax or have otherwise been privy to. Give this a shot when you’re researching your next used car purchase.
CarEdge Insights
