December is often one of the best times of the year to buy a new car, if you need one. As the year comes to a close, car dealerships ramp up efforts to meet their annual sales targets and clear inventory, resulting in good deals before next year’s models hit the showroom floor.
“This can translate into attractive discounts, incentives, and deals that might not be available at other times of the year,” says Ernest North, co-founder of fully digital insurance platform Naked Insurance. “However, while the festive season brings opportunities, it’s also essential to weigh the potential benefits against reasons why it might be better to wait.”
With anticipated releases like the plug-in hybrid version of the Ford Ranger and a facelifted Toyota Corolla Cross estimated to arrive in 2025, some buyers may want to hold off until the new year to explore the latest options. Additionally, recent interest rate cuts mean car buyers are paying less for financing, and with further cuts anticipated, waiting could potentially unlock better rates and more savings.
Below are some pros and cons to help you decide if buying a car this time of year is the right choice for you.
5 reasons to buy a new car in December
- Year-end discounting: Dealers are under pressure to meet sales targets and move cars out of inventory before next year’s models arrive. They often offer better discounts, cashback incentives, or low-interest financing options in the last week of December and early January.
- Demo models at lower costs: December might be the ideal time to snag a 2024 demo model with minimal mileage at an attractive price.
- Better trade-in values: If you trade in your car during December, you may receive a better trade-in value compared to January when it depreciates another year.
- Early registration benefits: Buying a car at the end of the year allows you to register it in January within the legal 21-day window. This could boost its resell value.
- Get ahead of price increases: The price of new cars tends to go up when the new year’s models arrive. Buying in December can beat price increases in the new year.
5 reasons to wait before buying a car
- Potential for better deals in January: While there are good discounts in December, some dealerships might offer even deeper discounts in January to clear remaining stock. Also, if you’re considering a used vehicle, you might find good deals with private buyers and dealers getting set for the new year.
- Fresh financing deals: Banks and dealers often introduce competitive financing deals at the start of the year, potentially offering better interest rates or finance terms. With interest rates that have already started to ease and economists predicting further cuts in 2025, buyers could benefit from improved affordability and better financing options in the months ahead.
- A new model might be around the corner: If the car model you like is due to be refreshed, it can make sense to hold on before buying. Research the model to understand its release timeline and features. The old model might become available at a better price, or you could pay a similar price to get the new variant as you would for the old.
- Seasonal budget strains: The festive season and back-to-school are expensive times of the year. Before committing, you might want to ensure you can comfortably afford that new car.
- Anticipated life changes: If major changes like a new job, a house move, or a growing family are on the horizon, it might be better to hold off to ensure your new car meets your evolving needs.
A few financial tips for car shopping
To ensure you get the best deal possible when buying a car, keep these tips in mind:
- Get pre-approved for financing: Pre-approval gives you a clear understanding of your budget and more leverage to negotiate with dealers.
- Check trade-in values: Knowing your current car’s trade-in value helps you negotiate a better deal with fewer surprises.
- Don’t forget insurance costs: Insurance is an essential part of your monthly car budget. Get a couple of quotes on the car you’re considering to ensure the costs fit your financial plan. With Naked you can get a quote and buy cover online while finishing the paperwork at the dealer’s office.
“It’s all about finding the right balance between opportunity and timing,” says North. “By planning ahead, understanding the options, and getting your finances in order, you’ll be ready to drive off with the right deal for your needs.”
