Lowest Price on a New Car at End of the Month: Old Wives’ Tale, Urban Legend, or Fact?

This question is on the top ten list of most common questions I’m asked. The answer is “Yes”, you usually can save money when you buy new car at the end of the month. You also can save money on used cars, but not nearly as much.

The caveat is not to wait until the end of the month to begin your search and do your research. Be sure you’ve done your due diligence in choosing the right car for you and gotten competitive out-the-door bids from at least 3 dealers. You should have checked TrueCar and Costco pricing as discussed in my previous two blogs. If your reading this in my newspaper column, you can access all of my blogs at www.EarlOnCars.com.

Once you’ve gotten your best price on the specific car you intend to buy, you should “sit tight” until the end of the month. You will be “deluged” with warnings by car salesmen that this price won’t be good unless you buy the car now; or, this car will be sold if you don’t buy it right now. Ignore these threats. Toward the end of the month recontact the dealer that gave you his best out-the-door price. In case you don’t know the definition of an out-the-door price, it’s THE PRICE YOU WRITE YOUR CHECK OUT FOR, HAND IT TO THE SALESMAN, GET IN YOUR NEW CAR AND DRIVE IT HOME. Don’t accept anything less just because they say it’s an out-the-door price.

Here are all the reasons you can get a much better price at the end of the month. (1) All car salesmen are paid on a monthly commission based the number of cars they sell in each month, and there are usually bonuses at the end of the month. (2) Sales managers are paid the same way. (3) The auto manufacturer pays the dealership end of the month bonuses. (4) Both manufacturers and dealers pour on their advertising at the end of the month which increases the competition between dealers. (5) Car dealers and auto manufacturers are “insanely competitive (I know because I’m insanely competitive…just ask anybody who really knows me.) Competition is your best friend when you’re buying a car. The end of the month is a perfect storm of competition between auto manufacturers and between car dealers. (6) Auto manufacturers and car dealers generate their financial, profit and loss statements monthly. They place huge emphasis on making their net profit forecasts. The typical car dealership will sell more new cars in the last 10 days of the month than he did in the first 20. (7) I’m writing this article on December 14 and you’ll be reading before the end of the year. THE END OF THE YEAR IS LIKE THE END OF THE MONTH “ON STEROIDS”. It’s the perfect time to buy your next new car.

A final word of caution on not venturing into a car dealership at the end of any month without having done your due diligence. The same factors that I just described can work against you, if you’re not fully prepared. Because car dealers want to sell you a car so bad at the end of the month, they’re likely topromise you anything they must, to make it happen.

TrueCar: Almost as Good as Costco to Buy Your Next New Car

In my previous column, I recommended CostcoAuto.com as the “Your Best Bet for a Low Price”. You can access that column at EarlOnCars.com. TrueCar.com is almost as good as Costco. When you use TrueCar carefully and diligently, you’ll get a fair, low price. When you use the Costco Auto Buying program, you’ll probably get a lower price, but not by much. This is because Costco contractually requires their certified dealers to give Costco members a lower price than they have sold the same car to anybody else.

So, why am I even mentioning TrueCar? It’s because (1) TrueCar’s program is easier to understand and use, (2) dealers’ hidden fees and extra dealer installed accessories are more clearly added to the bottom line price, (3) TrueCar offers many more certified dealers to choose from, (4) TrueCar gives your market price comparisons of what other buyers of the car you are buying paid, (5) TrueCar doesn’t require a $60 annual membership fee, and (6) perhaps most importantly, you can transact a TrueCar purchase entirely online. Costco requires you to go into the dealership.

I just mystery-shopped, online, TrueCar for a new 2020 Ford F-150 XLT with an MSRP of $46,525. I used a factitious name and email address. No phone number is required. I was able to get quotes from 42 Ford dealers, but I chose only to get final prices from two within a reasonable distance, Wayne Acres Ford in Greenacres, FL and Grieco Ford in Delray, FL. The lower of the two was Grieco Ford with an $8,299 discount from MSRP plus $1,459 in dealer fees and dealer installed accessories for bottom line price of $39,685. This price also included all factory incentives. All I’d have to pay in addition to drive my new F150 home were government fee…sales tax and license/registration.

I could probably have gotten a slightly lower price if I’d pursued this with some of the other 40 TrueCar certified Ford dealers available to me. However, TrueCar showed this price to be an excellent one based on actual transaction prices from their database. To be a TrueCar certified dealer, you must agree to allow TrueCar to access your computer database which reveals the actual transaction prices on all the vehicles you sell. In the last 30 days, my price was well below the average price…there were 4 sales of this F150 at a “high” price, 4 at a “fair” price, 8 at a “great” price, and 7 others at an “excellent’ price like mine.

It took me about 10 minutes to go through the above process. If I had been a real buyer, I could have gotten the lowest price from 42 Ford dealers, and it would have taken me an hour two. Compare this with driving from dealership to dealership, shopping dealer websites online, making phone calls, and there’s no comparison. As I said at the beginning of this article, don’t use your real name or email address and there’s absolutely no reason to give dealers your phone number. The harassment from car salesmen if you shopped 42 Ford dealerships and gave them your real contact information would be ENORMOUS. You can easily obtain a free email address from Google, Microsoft Outlook, Apple/iCloud, and AOL.

If you really want a super-low price and don’t mind spending a little more time,use Costco and TrueCar. Remember, that you’ll rarely see two car dealers quote you the same price on the same car. The more dealers you check and the more prices you compare, the lower the price you can get. Comparing at least threedealers is necessary, and you’ll realize a large savings from this. As you shop and compare more than three, the amount of the savings decreases incrementally. The Internet which spawned online car buying and third-party car buying companies like Costco Auto and TrueCar makes it possible to shop and compare as many dealerships as you want to. Furthermore, you’re doing all this from the comfort and privacy of your home.