Labor Day is traditionally a time of endings: The unofficial close of summer, of school vacations, and of the high season for road trips across the USA. But motorists who enjoy driving hard bargains know it's also a perfect time to get behind the wheel of a new car.
The week before Labor Day is a triple opportunity for bargain-conscious car shoppers
It taps into two traditional sweet spots for car-lot bargains: the last days of the month, when dealers eager to meet sales goals are typically more open than usual to price negotiations; and three-day holiday weekends, when dealerships traditionally offer markdowns to entice customers with an extra shopping day on their hands. And perhaps best of all, the run-up to Labor Day marks the annual unveiling of new car models for the coming year.
Dealers hope to draw in customers eager to see next year's trendy rides, but smart shoppers know the arrival of new vehicles can mean terrific savings on the (equally shiny) unsold cars from the current model year. To make room for 2018 models, 2017 models—still brand-new and under full manufacturer warranty—suddenly become closeout deals.
This three-way opportunity can mean major savings. In fact, TrueCar estimates you can save $3,106 or more on a new car this week, by combining end-of-month, holiday weekend and model year-end savings.
If you decide to take advantage of car bargains for Labor Day (or just after the holiday weekend) and plan to finance the car through a loan, here are some additional guidelines to consider:
- Shop around for auto loans: Applying for credit typically causes a small reduction in your credit score, but there's usually no hit to your credit scores if you apply to multiple lenders for the same loan amount within the space of several weeks. Interest rates and fees can vary significantly by lender, so shop around for the best deal you can get. Your dealer likely has several financing resources, and the Experian Auto Loan comparison tool can help as well.
- Compare financing deals: Financing based on the total you'll pay, in principal, interest, and fees, over the life of the loan.
- Avoid loans with prepayment penalties: Extra fees you have to pay if you finish paying off the loan ahead of schedule—and then try to pay off the loan early. Try adding $25 or $50 extra to each monthly payment, making 13 monthly payments each year, or any other strategy to reduce the lifespan of the loan — and the amount of interest you'll pay.
Drive safely! And if you take a spin to the auto showroom, happy shopping!