Well, for a lot of folks, this time of year marks a retreat indoors as well as a retreat away from spending. After the holiday rush – from Black Friday to Christmas sales to post-New Year’s deals – the start of the year can ask for a little tightening of the pocketbook/wallet. That said, we’re here to burst your savings bubble…in a way. You see, January happens to be an optimum month for consumers who are looking for real discounts with a lot less competition. And with dealership really on the edge of their new models arriving, they are often eager to clear out any “old” (2025 is literally only a few days ago) inventory. Which means that now is a great opportunity for savings.
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So, let’s explore how to buy a car this January!
Timing.
If you do a quick peruse through trusted source, Kelley Blue Book, you’ll likely read about how January offers excellent opportunities to catch a deal on a vehicle. This is, of course, because of sales numbers dropping post holiday season. But not all holidays mark a decline: Martin Luther King Jr. Day often sees dealerships offering special promotions with fewer shoppers out to crowd the showrooms.
Affordability.
Affordability is not something reserved for the automotive space alone; no one wants to find themself in over their head when it comes to owing money. So if you’re thinking about financing a new ride and want the pay-back process to feel comfortable and accessible, it could be a good idea to stick to the 20/4/10 rule. Broken down, this rule looks like:
- 20% down payment
- A 4-year loan
- All-inclusive car expenses that do not exceed 10% of your monthly income.
This strategy generally allows for a form of long-term affordability that ultimately means more than seemingly low monthly payments.
Loans.
As with so many areas of life, a little research can go a long way. In terms of loans, you can start by checking your credit score. Everyone knows that a good score is absolutely a must for being approved for friendly loan terms. In general, in order to be offered prime rates, you want to present (or work towards) a credit score that sits above 660. To find the best possible deal on a loan, it can also be helpful to consider and compare interest rates and other related fees from different banks, credit unions, and online platforms as well as those available at dealerships.
Terms.
Recently, it has become a trend for dealerships to encourage buyers to go for longer loan terms, like the growing 84-month option. However, while the monthly payments will be lower than a shorter term loan, these types of long loans quickly and easily accumulate substantial interest, resulting in an overall higher expenditure. On the other hand, shorter loan terms may mean higher monthly payments, but ultimately save you money as cumulative interest rates will be lower.
So, with a little smart timing and some savvy financial planning, January could very well be a great opportunity to drive away with great car, a sweet deal, and an accessible loan.
