Editor's note: Jean Chatzky, the financial editor for NBC’s "TODAY" show, is an award-winning personal finance journalist, AARP’s personal finance ambassador, and a contributing editor for Fortune magazine. Her eighth and most recent book is "Money Rules: The Simple Path to Lifelong Security." Jean blogs at www.jeanchatzky.com and tweets @JeanChatzky. You can find her on LinkedIn and Facebook, too.
Is August the sweetest month? When it comes to car buying, new data from TrueCar.com say yes. According to the site, the average transaction price (i.e., the price shoppers actually pay) for vehicles this month is about $29,296, which is 2.4 percent lower (or $716 less) than the average price the rest of the year.
You're going to see lower transaction prices this month because dealerships are trying to clear out their lots for the newer models rolling in, says Scott Painter, TrueCar's founder and CEO. August tends to be the last part of this "model-year changeover," so they’re really pushing inventory with incentives, he says.
If you're shaking your head because you were told December is the month to get the best bargain, don't worry -- you're not nuts. It depends on what you're looking for: the best bargain on any car, or the best bargain on a certain car.
"The caveat here is that the inventory slowly decreases towards December," says Philip Reed, Edmunds.com senior consumer advice editor. "So if you're a bargain shopper and really don't care about having options (models, colors, etc.), then wait as long as you can (until December). But if you want a reasonable selection at a good price, then start shopping (as the new models roll in).”
If you are heading out into the market, here's how to make sure the deal you snag is one of the best:
Do your research. The prices provided by sites like TrueCar.com (which focuses on new cars) and CarGurus.com (which specializes in used) are guides. Keep them in mind, but understand that in order to snag the best deal you also need to be aware of current incentives available and know how to apply them. You can find lists of incentives at Edmunds.com. The importance of incentives is also why, whether you're shopping in August or any other month, you want to try to get to the dealer in the first two days of the month. Why? At the beginning of the month, which is also the beginning of the sales cycle, Painter notes, all of the incentives are in the pipeline, and dealers are looking to use them to get their sales rolling.
Work with the Internet department. Once you zero in on a good dealership, consider working with its Internet department to buy your car instead of negotiating on the lot, says Carroll Lachnit, features editor at Edmunds.com. These departments can set up test drives and info meetings, but they're paid to move volumes of cars rather than maximize their commissions. "They're more interested in doing good deals -- and a lot of them -- rather than trying to make a big score on an individual car sale,” Lachnit says. And because the Internet department will likely know the deals you're seeing online, they'll be more willing to price-match.
Focus on maintenance. Car buyers often spend so much time negotiating the price of a car they forget about the cost of ownership. That means insurance, gas and maintenance. These days, the latter can be a particularly important differentiator. More cars are being marketed with the first three to five years of maintenance included. If you're comparing one vehicle with another, understand that can be a savings of about $750 per year, according to data from AAA.
What do you think? What’s your best tip for getting a great deal on a car?
-- With reporting by Kelly Hultgren