It’s time to buy a car! Says who? Economists, that’s who!
We don’t take their advice when it comes to colors or styles (clearly) but
Car prices this month are low but they’re not THAT low. Here’s how to read and question ads.
when it comes to prices, economists know a thing or two. They’ve been for decades studying peaks, drops and other patterns and know that car prices are lowest in September and October. It’s because dealers are trying to move inventory to make room for the new models that arrive in January.
So armed with that information, you’re now ready to buy and therefore definitely definitely a little excited about starting over in a vehicle that isn’t lightly dusted with crackers or reeking from two seasons of football practice pick-up. Basically, you’re vulnerable. So be careful when considering offers. Here are some common car ads, followed by the information that might not be posted in big letters.
- Vehicles are available at a specific low price or for a specific discount
What may be missing: The low price is after a high downpayment, often thousands of dollars, plus other fees, like taxes, licensing and document fees, on approved credit. Sometimes though the discount is only for a pricey, fully-loaded model. Or it depends on very specific qualifications like the buyer being a recent college graduate or having an account at a particular bank.
- “Only $99/Month”
What may be missing: The advertised payments are temporary and “teaser” payments, meaning they last just a few months. Payments for the rest of the loan term are much higher.
- Zero or Low Rate Loans
What may be missing: The low advertised annual percentage rate (APR) may apply only to small loans (up to a certain amount) that are less than most purchase prices. You will pay a higher APR for loans of higher amounts.
- “$0 Due at Lease Signing”
What may be missing: The fine print indicates that additional fees — sometimes several thousand dollars — are due at lease signing.
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