Winter is a magical time of the year. When December approaches, the year is coming to its inevitable conclusion. Across the country, families sit inside their warm, cozy homes, in front of the fire, to watch the snow gently fall, covering the ground. But, during his time of the year, snow isn’t the only thing that’s falling.
Car prices drop during the winter. Winter is historically the best time to purchase a vehicle – new or used. It’s not just because the holiday season warms the hearts of car dealerships – causing them to pass out discounts. The real reason is much deeper.
The end of the year is connected to the car dealership demand to push product and make way for upcoming new models. Along with many buyers, people are running businesses. Sales businesses. That means end of the year goals must be met, salespeople need their bonus incentives, and automakers are releasing new models. When you push back the curtains, there’s a lot more going on with winter car deals. Find out if buying a new car is better than buying used.
End of the Year Deals
“Blowout sale” is a common phrase you’ll hear in car commercials. You’ll first notice them at the start of November and see them run well into December. They let everyone know there’s a “blowout sale” happening on their nearest dealership.
What does “blowout sale” even mean?
This is just one of many snappy campaigns that entice people to purchase a car during the winter. Dealerships slash prices to incentive the public to buy. They market to the those who have completed traffic school and are just on the cusp of investing in a new off the lot car, but still need to get that added encouragement.
Whether it’s a holiday gift to someone you know, or you finally wanted to upgrade your vehicle, there’s a special end of the year deal that will match your needs. That’s why winter is always a wonderful time to purchase a new car. However, there’s a reason why these “blowout sales” pop up during the winter.
Dealerships Need to Hit Their Sales Quota
Winter sales campaigns often have nothing to do with holidays. They just coincidentally serve as a convenient reason to run ads. People who sell cars meet quarterly and yearly sales goals. This means they must reach a sales quota at the end of every business quarter and a greater quota at the end of the year. The year-end goal is something that will push the sales person to move more cars and set a new record, therefore raising the proverbial bar.
To help the sales team meet their quotas, dealerships will launch sales campaigns to encourage people to buy cars. That’s why a countless stream of commercials advertising flashy new deals will pollute your television. The dealership isn’t trying to cut you a deal, they just have a hungry sales team looking to hit their goals.
Making Room for New Models
The reason why they want to sell more cars at the end of the year is because they need to make room for next year’s new models. To stay current and competitive, dealerships need to invest in the latest and greatest model of cars. Along with this, automakers provide major monetary incentives for dealerships, if they’re able to move out last year’s models.
Therefore, dealerships may be more lenient to cut you a deal or negotiate on a price over older models. Leaving older vehicles on the lot will drive down their price and be detrimental to the success of the business. Kind of like how the following months go for most dealerships.
New Year Sales Slowdown
According to money.usnews.com, the winter season is the slowest months for sales. Especially after major spending holidays. People start the new year wanting to focus on the important things in their lives. Which means there’s less spending during the winter.
For buyers, this will dramatically work in their favor. Dramatically was used to describe the negotiation process with a car salesperson, because they’ll buckle at the opportunity to close one more sale during slow months. During these months, the buyer has the negotiation power. Cars move slow and people aren’t willing to spend the full price on the newest car model.