Buyers can ensure they secure a deal aligned with their needs and circumstances by evaluating options, preparing finances, and planning.
Several factors influence the decision to purchase a new car at the end of the year, including attractive deals offered by dealerships aiming to meet annual sales targets and clear their inventory.
“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 Naked Insurance.
However, while such opportunities are presented during the festive season, potential reasons for delaying the purchase must be carefully considered.
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Affording a car in 2025
Recent interest rate cuts, combined with further reductions forecasted for 2025, suggest that car financing may become more affordable in the coming months.
Why you should buy a car in December
North gives five reasons why potential car buyers might consider purchasing a vehicle during the festive season.
- Year-end discounting: Dealers are pressured 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 resale 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.
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Why you shouldn’t buy a car in December
North gives five reasons why potential buyers should consider not purchasing cars in December.
- 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 could be cut further in 2025, buyers could benefit from improved affordability and better financing options in the months ahead.”
- A new model might be around the corner: 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: 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 on buying a new car to ensure it meets your evolving needs.
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To maximise value when purchasing a car, the following financial strategies are recommended:
- Seek pre-approval for financing: This step provides clarity regarding the budget and strengthens the buyer’s negotiating position.
- Research trade-in values: Knowledge of the current vehicle’s trade-in value helps in negotiating a favourable deal.
- Account for insurance costs: As a significant component of car ownership expenses, insurance costs must align with the budget. Digital platforms like Naked Insurance simplify obtaining quotes and purchasing coverage.
North says achieving the best outcome involves “finding the right balance between opportunity and timing.” Buyers can ensure they secure a deal aligned with their needs and circumstances by evaluating options, preparing finances, and planning.
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