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James Cleary21 Jun 2010
ADVICE

Perfect timing: picking the best time to buy

Picking the right time to buy a new car can save you big bucks. But which month of the year, which week of the month, and which day of the week is best?

Happy Oofiss! Compliments of the season to you and your family... Hope you have a good one.

What's that? You haven't heard of Oofiss? Well, you're probably more familiar with the traditional spelling... EOFYS, which of course means End Of Financial Year Sale. A festive time of sharpened pencils, singing calculators and gaily-coloured cheque books. Letterboxes are filled to overflowing with joyous messages of savings and good cheer. Everything from iPods to eye glasses are reduced, slashed or just plain on-sale.

And by the way, Oofiss is a pretty good time to be in the market if you're after a new car. This is the biggest seasonal selling period of the year, and June is usually the tallest column on the annual auto sales chart.

Which begs the question: is this in fact the best point at which to darken a car dealer's door? Or are there other factors you should consider?

End of financial year
According to Shane Priest from automotive leasing, finance and management specialist in novation, "The mentality of financial year-end is actually meaningless for consumers, but it's there, and it's big".

He adds: "Dealers of imported brands have come off a chronic shortage of stock thanks to production wind-downs caused by the GFC. And carmakers in Europe and the US are still in the doldrums. But after a slow 2009 here people appear to be sick and tired of negativity, and manufacturers are getting a little more gung-ho." 

And current sale activity supports that position. In case you hadn't noticed, right now 'Toyota Means Business' (a sales event it's run at the end of the financial year since the dawn of time), Ford's in the midst of its 'Half Year Sale', while Honda, Mazda and Mitsubishi are each having a classic EOFYS. In fact, just about every automotive brand in the Australian market is currently priming an already booming marketplace with some kind of discount or value-add sales campaign.

But is the biggest sale period necessarily the best time to buy? With automotive brands now banking on increased mid-year sales does an alternate purchase strategy offer better value?

End of calendar year
You might think November-December is confined to fighting over the last Tickle Me Elmo on the toyshop shelf, cricket on the radio and family bunfights around the Christmas dinner table. Well, it also signals the start of an intense year-end sale period, with dealers focussed on clearing current model-year stock.

European models can spend the best part of three months on a boat making their way here. So the car you buy in December may have rolled off the production line in August/September. Even cars from Japan and South Korea will spend at least a month on water, and juggling supply towards the end of the calendar year can be tricky for importers particularly.

A car with last year's build plate is traditionally harder to shift in the New Year, and dealers will be even keener than usual to trade aggressively. So you can look forward to incentives in the shape of additional equipment or cash bonuses.

New calendar year
And what about the cars that don't make it out the showroom door before December 31?

January is something of a carry-over month. Logically, buyers will understand that even locally built models will wear last year's build plate. But by the time February / March rolls around cars built in the prior year are starting to look less appealing.

And it pays to be aware that every new car sold in Australia carries a build plate and a compliance plate. Each is most often located in the engine bay, and they're different.

The build plate lists a car's mechanical DNA -- everything from the unique vehicle identification number (VIN) to engine, transmission and paint codes; plus the date of manufacture (usually month and year). The compliance plate confirms the VIN and notes the date (again month and year) the vehicle was certified as complying with relevant Australian Design Rules (ADR) and approved for sale.

So given their travel time to Australia, on the majority of imported vehicles the date of compliance will vary from the date of manufacture.

You may have purchased and registered your new pride and joy in March 2010. It proudly wears a 2010 compliance plate, but the build plate lists the date of manufacture as November 2009. And it's the build plate that counts in terms of defining your car for evermore as a 2009 model, with all the retained value implications that brings with it.

Many brands will tackle the situation head-on, kicking off a New Year sales campaign in February, offering discount price or extra equipment incentives on cars built in the prior year.

Irrespective of these sales, as a general rule it's a good idea to clarify the build date of the actual car you're buying. Cars from a slow-moving model line have been known to celebrate their first birthday in dealer or distributor stock. So in extreme cases what looks like a 2010 model could actually be 2008 vintage.

Model runout
It's not always about the calendar per se. Whether the model you're in love with is in its first flush of youth, experiencing a mid-life crisis or entering the twilight years can make a huge difference as well.

The excitement surrounding the launch of a new model will usually (but not always) result in a rush of buyers clamoring for ownership of the newest, shiniest metal available. And understandably, with demand running hot, manufacturers and their dealer networks are highly unlikely to knock a single cent off the recommended price.

Inevitably though the honeymoon ends as initial demand is satisfied, fresh competition arrives, and the sales rate settles to a slightly more subdued pace.

It's in this business-as-usual, mid-life phase that freshen-up improvements are introduced as model year upgrades. These could be purely cosmetic (new colour or trim options), safety related (additional airbags) or performance focussed (improved engines)... Anything from a booming sound-system and new headlights to better fuel-efficiency and sat-nav as standard.

And the good news is, more often than not, these updated models will wear the same sticker price as the ones they're superceding.

So it pays to be aware of 'new model year' introductions -- a double saving opportunity, with on the one hand upgraded cars offering extra fruit at little or no extra cost. And on the other, dealers ready to do what it takes to clear superceded stock (often with the support of under-the-table factory subsidies). 

Speaking of old stock: as the model in question enters the sunset of its existence, snippets of information about its faster, safer, more luxurious replacement will have almost certainly leaked out.

In a perfect world, production of the out-going car will have been carefully fine-tuned to match softening demand. Dealers will have exactly the right number of units in stock, negating the need for any distress selling or discounting. And build of the new model will have been ramped up in precise harmony, to maintain overall production levels at or above 'critical mass'... The new car's yin to the old model's yang.

Yeah, right. In the real world, the automotive sausage machine isn't such a surgically sharp instrument, and consumer demand isn't perfectly predictable. So the end-of-model run-out is born.

Christopher Zinn from independent consumer group CHOICE suggests checking the models you're interested in to determine how long they've been in production. Carsales.com.au lists 'release year' information on all current models.

As Christopher says: "The automotive lifecycle varies between manufacturers, with major updates about every four or five years. So the longer you have to trace back, the greater the chance a new model is imminent."

Adding that, "Buying a soon to be superseded model, especially by a new-generation car, will give you a point of leverage with the dealer, as its resale value will suffer with the arrival of the new model."

And when it's all out in the open and a launch date for the new model has been confirmed an "end-of-model run-out, do-a-deal clearance, free set of steak knives sale" will surely follow.

So if you're not fussed about the arrival of the all-bells-and-whistles new model, it's a great time to swoop vulture-like from an overhanging branch and save significant dollars on the out-going car.

Which day of the week
Aside from seasonal sales and model run-outs, is one day better than another for buying a car at the best price? Traditionally, the last day of the month, in the last month of the quarter, has been a potential sweet spot for new car buyers.

Dealer sales targets are most often set on a monthly and quarterly basis. Hit the target and the manufacturer may provide the dealer with additional marketing support, bonus dollars on each car sold, or points in an incentive program. And if the sales manager's sweating bullets, pushing to reach target in the last trading week of the quarter it may well be worth their while to cut you a spectacularly good deal, record another retail sale and qualify for the bonus benefits that achieving quota will bring.

But the new car market is buoyant, with year-to-date sales up 20 per cent on 2009. That kind of target-driven pressure isn't the norm in 2010. And according to Tim Barrett, general sales manager at one of Australia's biggest Toyota dealerships (Nunawading Toyota in Melbourne's East), "Through the working week, one day's much the same as another." 

He does add however: "The weekend is probably best from a buyer's point-of-view".

According to Tim: "There's a lot more activity in the dealership on Saturdays and Sundays. The salespeople are pumped up, and dealers always want to record a good weekend result."

SO WHAT ARE YOU WAITING FOR?
So there you have it -- three seasonal selling periods for new cars, and we're in the middle of the biggest one right now.

If you're still in research mode (and not in a hurry), next cross on the calendar should be in mid-November... And following that, think about the New Year clearances that will undoubtedly kick off in February.

Remember, it also pays to do your homework on the life-cycle of cars on your shopping list. Models getting long-in-the-tooth offering significant saving opportunities.

And as well as all that, make sure when you're ready to hit the dealership you do it on a Saturday or Sunday. So have a good weekend. Have a Happy Oofiss. We're hoping you bag a bargain.

Read the latest Carsales Network news and reviews on your mobile, iPhone or PDA at www.carsales.mobi

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Written byJames Cleary
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