Should you get new wheels during the festive season?

The time of the year that you buy a car can have a bigger impact on the price than you think. For example, you might be able to get better deals during December when dealerships are making a final push to meet annual targets and get 2023 stock off the floor before the new year.

To narrow it down even further, the last week of December and the first week of January can be particularly good times to buy because there aren’t many other buyers around, says Ernest North, co-founder of fully digital insurance platform Naked. “At Naked, we usually see strong sales during the Christmas to New Year week because people can buy cover online at any time and anywhere, even while they’re tanning on the beach.”

Here are some reasons it can be a good idea to buy a car during December:

– Dealerships are running out of time to meet their sales targets and sell 2023 cars before they become last year’s model. That means you can find some better deals or negotiate a higher discount than during other times of the year.
– December might be a great time to snag a 2023 demo model with 5,000 km on the clock for an attractive price.
– If you trade in your car in December rather than January, you may get a better trade-in value.
– Get the timing right and you might be able to register your car in early 2024, given it’s within the legal requirement of 21 days, which may lead to a higher resale value. However, keep in mind that it is illegal to purposefully delay the transaction by signing a contract late so that the registration only happens in the new year.
– On the other hand, if you register it as a 2023 model, you might benefit from a lower insurance premium than you would for a 2024 car.
– Buying now might allow you to miss the inevitable price increases when the 2024 models hit the showroom.
– If you got a bonus, you could use it towards the deposit to reduce the interest you pay over the term of the loan.

There are also some reasons that December might not be the best time to buy:

– If you’re eyeing a car that will be getting a facelift next year, it may be better to hold fire. When the new model launches, dealers will probably run some specials on the older model.
– Many people have a lot of additional expenses over the festive season, then face big costs like school fees and books early in the year. If you’re on a tight budget, it may make sense to see what your finances look like in January before buying a new car.
– Are there any uncertainties or big changes ahead for you in the new year like a baby on the way, a new job that requires you to drive to the office every day, or a potential house purchase? Factor these in before committing to buying a car.

Remember, do your research and consider all costs of ownership

North says that whatever you decide, it’s important to keep in mind that the value of a car depreciates over time. “Think of your car as part of your cost of living. Buying a new car means spending money you could otherwise invest,” he adds. “So, think about whether you really need the car and if it’s the best way to spend your money.

“Research online, shop around and test drive to find the right car for you. When you’re negotiating with a dealer, you might be able to get them to agree to cover the license and registration costs or extend the warranty or service plan if they won’t move on price. Also, remember that volatile interest rates and rising fuel costs mean you should budget carefully. Calculate what the repayment would be if the interest rate went up by 2% or even 3%. Include fuel, service and maintenance, repairs and insurance in your budget.

“Times are tough. As such, some people buy insurance with the intention of cancelling after the high-risk festive season or once their financing has cleared,” says North. “It’s important to note that this goes against the terms and conditions of most policies.

“However, even more crucially, it’s not worth the financial risk to drive without insurance,” says North. “Even if you can live with the risk of your car being written off, and you can’t replace it, consider the potential risk of being sued and held liable for R2m or R3m of damage if you caused the accident. We recommend at least having third-party liability insurance. With policies from as little as R50 per month, it is an affordable alternative to comprehensive car insurance and a small price to pay for peace of mind.”

Digital tech makes buying and insuring cars easier than ever

A final tip is to make the most of today’s digital platforms. You can shop online to find the best prices for a car and arrange for delivery for a small fee. If you’re getting a loan for a car, your financier or bank will want to see your proof of insurance before you take ownership. These days, it’s possible to buy and get proof of insurance online or via an app, and drive your new car home in time for the new year.