Save Money on Car Purchases by Buying at the Right Time and Other Savings Tips

Avoid buying the newest models

When is the best time to buy a car? Well, it's not when a new model first hits the showroom floor.

If you're eyeing the latest model of your favorite make, Kimberly Palmer, a personal finance expert at NerdWallet, says you might want to wait or look for a great deal on last year's model. That's because major sales regularly take place when the newest model is about to hit the showroom floor. "Dealerships are usually trying to move the older model off their lot as quickly as possible," she says. "That generally means fall for U.S. carmakers."

Michelle Madhok, an online shopping expert and founder of deals site She Finds, says to aim specifically for September, when that push begins. "They want to get the newest models into the showroom, so that's also a good time to negotiate," she says.

Shop when dealerships are eager to sell

Conventional wisdom is true: Dealerships and individual car dealers are usually working to meet quarterly quotas. To take advantage of this, shop at the end of a financial quarter (the end of March, June, September, and December) to negotiate with a dealer who is eager for your business. Madhok says you can also try to get a good discount or bargain on financing.

"Dealers are also under pressure to meet monthly sales targets, so shopping at the end of the month can also mean you're more likely to score a deal," Palmer says.

In addition to quarterly goals and monthly goals, dealerships are also eager to meet annual sales goals, so Palmer suggests shopping in December. "That's why you'll see those car commercials with the big bow on the hood," Madhok says.

Even if your new vehicle isn't a Christmas gift, December is a good time to buy if you're in the market for a luxury brand. Madhok explains that these models aren't discounted as often as the less expensive ones, but you'll see dealers try to move inventory at the end of the year. "They don't discount [luxury] cars as much, but they will give you a better deal on leases and financing in December," says.

Time buying used cars right

Surprisingly, the best time for buying a used car is not the same as for a new car. Research by iSeeCars showed the best deals for used cars coincide with major holidays (including Black Friday) and other three-day weekends such as Martin Luther King Jr. Day. Christmas Eve is also a good time. The study also noted an exception to this strategy, reporting that Fourth of July deals occurred 28 percent fewer than average.

Plan in advance

Every car has its tell-tale sign of coming to the end of its usefulness: The radio stops working, the power-lock doors give up, or that grinding sound returns. You know best when it's time to start thinking about replacing your vehicle, which is why experts say you should plan for a car purchase well before you really need one. Careful planning prevents a minor crisis that could leave you without transportation and ensures you have the upper hand as you shop for a car you truly want at a price that won't break the bank.

"Dealers make the most money when you're desperate, in a rush, and don't have time to really comparison-shop," says car-buying expert Gregg Fidan, founder of RealCarTips. "If you feel your current vehicle may die on you, start preparing right away."

Keep an eye on your mileage and find out the expected lifespan of your car. With an approximate date or year in mind, mark your calendar and start shopping a few months in advance. Fidan says this is a good time to test-drive vehicles and develop a relationship with the dealer, and delay thinking about price until later.

"Your job now is to simply stay in touch with these salespeople, follow back up with them at least once a month and ask for updated pricing, and ask them to send you any special deals that come up—the good ones will stay in touch with you," Fidan says.

When you're ready to negotiate, Fidan says the end of the month is usually best. He also advises getting at least five bids from various dealerships before making your choice. In the meantime, keep your current car in tip-top shape because milking every last mile out of it gives you more time to plan your next purchase.