December is the fag end of the year, the time when dealers stop ordering new cars from automakers, when automakers themselves go slow on launches, and a time when most people are winding down, making holiday plans. So, is December a good month to buy a car? The conventional wisdom would advise you not to, but buying a car in the last month of the year can be very rewarding. Here’s how, and why.
Why not December?
Now, let’s understand why people are reluctant to buy a December made/registered car. Buying a car made/registered in December makes for poor resale value if the owner intends to sell the car within, say 3 years. So, buyers instead prefer to push back their purchases to January, so that they get the flexibility of one full year, as far as resale value goes. To illustrate, a December 2015 model will be considered as a 3 year old car in July 2018, whereas a January 2016 model will be considered a 2 year old car in the pre-owned market.
But resale value sometimes doesn’t really matter…
If you intend to keep your car for say 5-7 years. The depreciation is steep only for the first 3-4 years of the car, and as the vehicle ages, the depreciation slows down too. And as you use the car for a longer time, and clock greater mileage, you’d have also utilized the car quite well. So, if you don’t intend to sell the car quickly, it’s a good idea to buy it in December, because…
December means discounts
Dealers are under pressure to clear off 2015 stock, and December is when most car buyers prefer to wait for models built in 2016. And most dealers are willing to throw in a nice discount to lure buyers who don’t mind buying a car built and registered at the fag end of December. So, if you want a nice discount on your favourite car, which otherwise never gets a discount, December is a happy month to hunt.
December also means no waiting periods
Cars with waiting period that last months suddenly get very accessible, so much so that they are almost readily available. That’s the December effect. Most people who’ve been allotted cars made-in-December want their cars’ model year to reflect the next year. So, they defer their purchases, allowing people who’re behind them in the waiting list, to take delivery instead. So, even when you’re waiting in queue, December could spring a surprise for you. Renault Kwid owners take note.
One party trick
You can buy the car in late December, and get it registered in early January. What this usually means is, the resale value of the car remains strong. Many buyers go by the registration date rather than the make. So, you’ve got 50 % of the resale issue sorted in this manner. But make sure that you have an insurance cover note while driving around with a car that’s running on a temporary registration number.