If you're in the market for a new vehicle, the remaining weeks of December could very well be a great time to buy. Several recurring industry trends converge at year-end, creating favorable conditions that can help you save money. The auto experts at Edmunds have come up with three key reasons why December often delivers the opportunity for better deals — and what to know to ensure you get the best one.
Year-end sales quotas and dealership incentives
Manufacturers and dealers operate under annual targets, and December is when they make their most concerted effort to meet them. According to Edmunds transaction data, December has historically delivered the highest average discounts off the manufacturer's suggested retail price for both new and used cars. The pandemic somewhat upended that, sending new car prices skyrocketing year-round as demand exceeded supply, but that blip has largely stabilized since 2022.
Typically, as the calendar year draws to a close, automakers and their dealer networks shift into high gear, deploying cash-back incentives, financing specials and price cuts to help them meet sales goals and finish the year strong. As a car shopper, you can take advantage of this year-end push. By choosing to buy a vehicle in December, you are more likely to encounter a dealership willing to make a deal, even if it's less profitable.
It can get even sweeter for you if you can wait until the final week of the month. Edmunds data shows that the last few days of December — when dealerships are truly up against the wall of both monthly and annual deadlines — tend to produce the deepest discounts of the year. Think of it as the auto industry's version of a clearance countdown when every sale counts a little extra.
Outgoing model year inventory and clearance deals
As new-model-year vehicles begin to arrive, many dealerships find themselves with previous model-year vehicles still on the lot. These outgoing models become ripe for discounts because they're taking up space and declining in value. In a handful of states, dealerships are also required to pay a tax on the value of their inventory on the lot as of January 1. This is a massive hidden motivator that drives desperation on December 31, specifically for vehicles that have been on the lot for 90 days or more.
Edmunds highlights that vehicles from the outgoing model year or those undergoing minimal changes often get steeper incentives. While new models are launched year-round these days, December is when current-year models still on the lot are targeted by sales managers as ''must-move'' inventory. Currently, that means 2025 vehicles will receive the largest discounts.
