Should you buy a used car at the start of the new year?

Car salesman hands over the car keys to a family man signing papers in a car dealership showroom.

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It’s a new year, and for some, that could mean a new car. But is the beginning of the year the best time to buy a new car – even if it’s used?

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GOBankingRates did some research and spoke to the experts to find out what you need to know when trying to figure out the best time to buy a used car. Read on to see if you should make a used car one of your first purchases of 2023.

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Why buy a used car?

You might want to treat yourself to a new car, but there are definitely advantages to driving a used car. In addition to a lower selling price, you also benefit from lower insurance costs, according to Insurify expert, Clinical Professor of Finance at the University of San Diego School of Business, Dan Roccato. “Your heart wants a new convertible, but your wallet wants an older sedan,” Roccato said. “Driving used cars [will] to save [you] to skyrocketing auto insurance prices, which we expect to rise 16% by the end of 2023.”

Other reasons for buying a used car are lower depreciation and low-interest loans. Although a new car may sound more luxurious, in the future you will probably be glad you saved some cash by buying a used car.

When are the best months to buy a new car?

Reports show that January, February and December – in that order – are the best months to buy a used car. In other words, you’re making a smart choice when you buy a new car earlier this year. The reason for this is that cars from this year are being sold, so many customers trade in their old vehicles to get a bargain on a new car. Because of this, there is an increase in the stock of used cars with less demand than at other times of the year.

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Another reason for lack of demand? The weather. “Colder weather can also limit the number of potential customers visiting retailers and encourage retailers to offer sales more frequently than in warmer months,” says Chase Gardner, data journalist at Insurify.

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Which used cars should you buy?

One aspect to look for when trying to determine which car to buy is to look for a car that has recently undergone a major design makeover. “You’re more likely to get a good price if the dealer feels pressure to make room for a new model year — especially if the car needs a redesign,” says Matt Smith, deputy editor at CarGurus.

Additionally, any car about to have a brand new release is another thing to research before heading to the dealership. “Anyone who manages to buy the previous model just before the new generation ends up in dealerships has a good chance of scoring a lot,” says Schmied.

You should also think about what type of car you are shopping for. The time of year when the car is most desirable can also affect how much you end up paying. “If you are looking for a convertible, winter is the time to look for the best deal. Do you need an off-road vehicle? Summer may offer the best deal as gas prices are typically higher during this time,” advises Smith.

What should you know before buying a used car?

Once you are at the dealership and know what type of car you want to buy, you should ask the right questions to get the best price. Joe Pendergast, vice president of consumer credit at Navy Federal Credit Union, says shoppers need to have a strategy and know what they’re getting into before they head out. “Anyone who wants to buy a used car should definitely ask the dealer how many previous owners the vehicle had and how long it was driven. If there were multiple previous owners who drove the vehicle briefly, that could be a concern.”

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Pendergast also recommends asking if the car was in an accident and if there is a unique vehicle title. “A clear title states that the vehicle has no remaining disputes over its ownership. If the retailer doesn’t have a title, I wouldn’t suggest closing the deal.”

Finally, find out what your total selling price is so you know exactly how much you’re paying. “A dealer can probably match any payment you name, but you’ll likely extend how long you’re paying for the car — at a higher interest rate — meaning you’re paying more over the life of the loan,” Pendergast says.

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