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Are the holidays a good time to buy a car?

By Claes Bell · Bankrate.com
Wednesday, December 1, 2010
Posted: 5 pm ET

You probably can't turn on the radio or TV right now without hearing someone suggesting in a grandfatherly voice that the holidays is just a lovely time to buy your spouse/child/parent a new Lexus/Mercedes/whatever, and offering great incentives to those with enough holiday spirit to take the plunge.

Ads like this one from Lexus suggest cars make good holiday gifts, but do they?

Ads like this one from Lexus suggest cars make good holiday gifts

But do auto makers actually offer better incentives during the holidays? Or are the ubiquitous scenes of people running joyfully through snow toward luxury cars wrapped in red ribbons just a clever marketing ploy? Luckily for us, Edmunds Auto Observer has a great post exploring just this question.

Unfortunately for those who've already bought their enormous red car-wrapping ribbon, Edmunds found average incentive spending per car rose only $31 between October and November of this year. That means the amount of money automakers spent on rebates, favorable financing rates and discounts per vehicle wasn't significantly higher on Black Friday than it was on Halloween:

Despite heavy advertising of seemingly attractive holiday deals, automaker incentives edged up only a bit, according to estimates by Edmunds.com. Nonetheless, the perception of great deals lured shoppers to showrooms over Thanksgiving in droves.

"Thanksgiving weekend drew out a lot of shoppers," said Jessica Caldwell, Edmunds.com director of Industry Analysis. "Foot traffic was up at dealerships all over the country."

And it turns out this November is a particularly unexceptional one for deals. The average incentive per car has dropped $255 this November compared to November of 2009.

As for the marketing of cars as Christmas presents, I must admit, I've never understood the allure. Unless you're fortunate enough to be able to buy a car with cash as a present for a loved one, taking on a car payment and the other attendant costs of car ownership -- auto insurance, registration, gas, parking, etc. -- in the name of the short-term thrill of a magical Christmas morning seems foolish.

Plus, unless you're willing to cover all those aforementioned costs yourself, you're saddling the gift recipient with a sizeable financial obligation.

What do you think? Are the holidays a good time to buy a car? Would you want to get/give a car as a gift?

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2 Comments
Meagan
December 07, 2010 at 9:02 pm

I think the whole giant red bow on top of a Lexis thing is just a marketing ploy. I don't know anyone who has every gotten a car for Christmas (or Hanukkah) and like you mentioned, unless you can shell out the whole cost of the car, plus taxes, etc it could be a huge financial burden on the recipient.

Mahendran
December 02, 2010 at 1:06 pm

Auto-Dealers are like department stores. If there is a sale everyday, then there is no sale at all.