Key takeaways
- Black Friday can be an excellent time to buy a car — if you can manage to find incentives for the car you want.
- Increased vehicle inventory will make it easier to find holiday car deals this year compared to last.
- If you want to save money and are flexible on model, the holidays can be a great time to buy a car.
Black Friday can be a time for great deals and savings, which is especially important given the remaining high interest rates. While car prices are holding fairly stable, according to Kelley Blue Book (KBB), shopping with savings in mind is the key to success.
Luckily, according to Brian Moody, executive editor at Autotrader, there should be more deals available this year than last. While he indicates the increase in incentives will be slight, any discounts can mean money saved for drivers this holiday season.
Black Friday car deals vary by manufacturer
Black Friday car deals are typically set and advertised at the manufacturer level, but local dealerships and large regional chains may also run their own deals. Black Friday car deals typically focus on financing, trade-in credits and lowered prices.
Financing deals
Financing deals are one of the most common Black Friday car deals. The deals are usually backed by the manufacturer’s captive financing company — like Chrysler Capital, Toyota Motor Credit Corporation or Ford Motor Credit Company.
Frequently advertised deals include $0 down payment, 0 percent APR and no payments for an extended period. All financing deals are only available on approved credit. Generally, the better the financing deal, the better your credit score to qualify.
These deals will usually have an equivalent dollar-off discount if you opt not to go for promotional financing. Even if you plan to finance a vehicle, you may be better off securing your own financing and taking the additional money off the sales price.
Non-financing deals
Many manufacturers and dealerships will offer a set amount off the Manufacturer’s Suggested Retail Price (MSRP) on Black Friday. They also sometimes advertise that they’ll offer a larger dollar amount for qualified vehicle trade-ins. Higher trade-in values lower the amount you must pay in sales tax on the vehicle you purchase, which can be as high as 8.25 percent at the state level.
Leasing deals
In addition to purchase deals, Black Friday car shoppers can also benefit from lease deals. If you decide leasing a car is right for you, you may be able to secure lower monthly payments, lower money down, or higher mileage limits through a Black Friday promotion.
Increase in Black Friday car deals compared to last year
Through last year, many dealerships were still grappling with reduced inventory, which made discounts few and far between. Incentives tend to grow along with inventory levels, and while inventory is on the up, it is nowhere near as high as prepandemic levels. In August, days’ supply was below the 83 days’ average in the first part of 2024, but it is up from last year’s supply of under 60.
When you’re shopping, it’s important to know vehicle inventory is not the only consideration that drives the prevalence of holiday discounts and the overall cost. Moody warns that high interest rates will still make it challenging for some borrowers to secure a competitive deal. “We still haven’t seen big drops in interest rates for car loans despite the Fed’s recent move,” he says.
Moody continues to explain that the type of car you intend to purchase will also play a role in the availability of discounts. “Buyers with good credit might get a better deal on a new car versus a lightly used car.”
Cox Automotive reported in September that the average new vehicle incentives package was just over 7 percent, or $3,522, a major jump from 4.8 percent a year ago. If you have improved your credit over the last year and are interested in a new vehicle, you will be more likely to find a deal. If your credit is lacking, and you have the privilege of waiting, time could save you money in interest.
Other end-of-year car sales
While Black Friday is all about deals, other winter holidays also offer savings. If you can be flexible on the makes, models and styles you’re interested in, you may be able to find discounts later in the year around Christmas or New Year’s Eve.
Once the holiday season passes, consider checking out deals in your area. Many dealerships offer special end-of-the-year discounts because they are aiming to reach sales quotas and make room for the newer models.
Bankrate tip
Advertised deals are not consistent across all dealerships. Determine which local dealership has the most competitive deals by researching before you test drive.
Get preapproved before heading to the dealership to save on interest
Securing preapproval for an auto loan is an essential first step before shopping, regardless of the time of year. The preapproval process will provide you with a clear picture of your budget and price range and help you come to the negotiating table with leverage.
You may find that you qualify for competitive interest rates through an online bank or local credit union. This can give you the power to negotiate for an even lower purchase price if you don’t need to chase after any specialty promotional financing the dealership is offering.
You can quickly find out how much car you can afford and compare loan terms and interest rates across multiple lenders using our prequalification tool. It only takes a few minutes and won’t hurt your credit score. It also may help you secure a bad credit auto loan option that doesn’t cost as much as one from the dealership.
Bottom line
If you need a car soon and can be flexible, Black Friday deals can be found. But don’t expect them to be as great as they were prepandemic. If you can wait, you may be able to find better deals at the end of the year or next year when inventory becomes more plentiful.
Read the full article here
