The best time to buy a used car or new car in Australia

Are you exploring the new car market? Or looking for a used car? Buying a car might be one of the biggest financial decisions you make, so it pays to get your timing right.

Seasonality makes a surprising difference to how much you pay for a new vehicle. Market trends, dealership sales targets and launch patterns can all influence car prices, so it’s a good idea to get a reasonable understanding of how they work.

If it’s a used car you’re looking for, car yards still have targets they have to reach by certain dates, so they may be motivated to discount stock at certain times too.

Strategic timing could potentially save you thousands of dollars when car shopping. This guide runs through some of the best times to buy new and used cars, to help you make an informed choice. We also give you tips on what to do when buying new, and what to look out for when buying used.

Key take-outs

• Both the end of the financial year and end of calendar year are good times to get deals on new and used cars
• Other key times to buy cars include plate clearance and model run-out periods, and at the end of each month and quarter
• Timing your car purchase should be combined with research and due diligence.

When’s the best time to buy a new car?

Timing the purchase of a new car is all about understanding market conditions and why dealers are motivated to close deals at certain times. Here are some tips for seasonal discounts:

End of financial year (EOFY) – late May to June

EOFY is commonly recognised as the best time to buy a car as dealers want to boost their figures before year-end. In the lead up to 30 June, both dealerships and manufacturers may be under pressure to meet annual sales targets, which can lead to aggressive pricing, bonus offers, and a willingness to negotiate.

If you’re buying at this time, you may be able to score:

• Discounts in EOFY sales events
• Cashback offers
• Offers on car finance
• Car loan fee waivers
• Extras such as accessories and upgrades, extended warranties, and servicing packages.

End of the calendar year – December

This is probably the second most important period in terms of discounting, as dealers want room as new year models arrive in their showrooms. Plus, many consumers will be directing their finances at the school holidays rather than towards new cars, so there’ll be fewer buyers in the market.

Benefits may include:

• Discounts on that year’s and previous year's models
• Extras and other incentives as per EOFY.

Plate clearances and model run-outs – often December to end of March

These too can trigger car dealerships to offer discounts on older models as they clear stock to make way for new car models. You may be able to negotiate:

• Discounts on cars about to be replaced with new model releases
• Discounts on vehicles built in the previous year
• Offers on demonstration cars (‘ex demos’) used for display and test drives.

Black Friday – November

Australia has inherited pre-Christmas discounting from the US, and it extends to the car industry. So, keep an eye out for Black Friday specials offered by the brands you’re considering. Holidays such as Australia Day and Boxing Day are popular for sales events too.

End of every month and quarter – year round

If you can’t wait for the times listed earlier, it may still be worth avoiding buying at the beginning of a month or quarter. Sales staff with monthly and quarterly targets to meet are likely to be more open to negotiation with car buyers at the end of these periods.

It’s also worth noting that changes in interest rates affect car pricing policy too – which can happen at any time of the year.

When might be the best time to buy a used car?

Perhaps the most obvious answer is ‘shortly after the best time to buy a new car’, when owners may be keen to offload their old vehicles in a hurry putting pressure on used car prices. Therefore, some of the following seasonal trends will look familiar.

End of financial year (EOFY) – late May to June

Strong new car sales running up to the end of financial year sales period can create a surge in trade-ins as well as private sales of second-hand cars. This increase in supply leads to:

• Greater choice of second-hand stock
• More competition amongst those selling used cars
• Dealers and private sellers more willing to negotiate
• Sweeter prices.

Plate clearances and model run-outs – often December to end of March

As with EOFY, used car supply is lifted by increases in new car sales as new models hit the market. This can result in:

• Competitive pricing
• A greater variety of vehicles available
• A better chance of vehicles being relatively new and well-maintained.

Vehicles that are 3 to 4 years old can represent good value, as they may already have experienced heavy initial depreciation whilst still having factory warranty.

Winter months – June to August

Car sales tend to quieten down as the days shorten, meaning that private sellers may be more flexible in their pricing.

Seasonal factors also impact the types of cars sold. For example, you may see better deals on convertibles and sports cars during cooler months.

Holiday periods – including December

In common with new cars, December can be a good time to pick up used car bargains – as dealerships are keen to boost their figures before calendar year end.

How can I get a better deal on my car?

Timing is important when it comes to buying a new or used car. But there are other ways you may be able to improve your chances of getting a good deal.

1. Do your homework
   Research the market online to establish new car costs and used car values for comparable vehicles (noting build date, trim, extras, etc.). This puts you in a stronger position for negotiations before you enter the dealership or car yard
2. Get pre-approved finance
   Knowing your buying power before starting negotiations is important; and having the money readily available makes you a more attractive buyer.
3. Know what you’re negotiating
   Don’t let salespeople get away with telling you how cheap a car will be based on weekly or monthly repayments. Always base negotiations on the total purchase price.
4. Prepare to be flexible
   You may get a better deal – particularly on run-out or clearance stock – if you’re prepared to compromise on colour, trim, or exact model.
5. Shop at a good time
   Try to shop early in the week, when there'll be less competition for the attention of salespeople. You’ll enjoy a more relaxed atmosphere, particularly later in the day.
6. Be prepared to walk away
   If you’re not happy with an offer, heading resolutely for the door may be enough to prompt a salesperson to make a better one.

What should I look out for when buying a used car?

This is the time when everyone wants to have a friend in the motor trade. It’s certainly wise to have someone mechanically minded to help you inspect the used cars you’re interested in, though there are still some basic actions we can all take. Smart buyers:

1. Ask about the car’s previous owners and accidents
2. Check for outstanding finance through the government’s Personal Property Security Register
3. Note the mechanical condition and any signs of wear
4. View service records
5. Take a test drive paying attention to driveability, performance, noises and vibration
6. Compare the mileage with the car’s condition
7. Check online for the value of comparable cars.
    

Many motoring organisations provide lists of independent mechanical specialists who are willing to inspect cars. If you’re a member of one, ask them for details of a specialist in your area.

How can I finance my new or used car purchase?

If you’re buying a new car, your dealer will be keen to discuss financing. But while that might be convenient and part of your negotiations, it’s important to shop around.

Westpac offers a car loan that’s secured against the vehicle you’re buying, so it features a lower fixed rate than our unsecured personal loan. Plus, when you apply online for a Westpac Car Loan for either a new or used car, you’ll get a response within 60 seconds.

In summary

Knowing how to save money when buying a car in Australia comes down to understanding how the market works. For both new and used car purchases, end of financial year and the end of calendar year stand out, while plate clearance and model run-out times score highly.

However, timing isn’t everything. Doing your research, knowing your negotiating power, establishing your priorities and carrying out careful inspections are important too.