A Guide to Year End Car Sales

The end of the year can be a very exciting time for people who are interested in the car industry. The weather gets colder, convention centers are getting ready for the big auto shows and fresh models are coming out from behind the scenes. While new cars are coming into the spotlight, last year’s models our being forgotten about.

What does this mean to you as a new car shopper? It all matters what your local dealer has in mind for getting rid of all the old models that are taking up space on their lots. Most importantly, it means automakers and dealers are willing to do quite a lot to make more room for new inventory. For you that can mean big savings and with car dealers being the go to place for buying new or used cars you can probably score some pretty decent savings.

If you watch football during the holiday season, you have probably seen holiday specials when commercials go into a break and your hit with a stream of car dealers and car manufactures promoting big discounts and special offers.

While at first glance it may sound like a scam, but there is some truth to their promotions. They need to clear out older models and usually car sales are slow during the winter because of holiday shopping and horrible weather. It’s easy to see why dealers are willing to take some money off the initial price.

Early shoppers no need to worry, as long as they don’t intend on outright buying the car. Automakers want their latest models to hit the streets, so they can start driving more traffic to their dealerships. This is why they frequently offer lower lease deals on some of the very first model cars that come to their lot. Those deals are typically not as big of discounts on older models, but it does allow you to be one of the first on the road with a new car and still have some cash in your pocket. Remember, winter is a very slow season for cars, so dealers are looking for ways to get in with the new and out with the old.

Here is a look at some year-end sales events that might look familiar:

Honda – year end blowout

Known as Happy Honda Days, this year-end clearance typically offers long term financing at a low interest rate. But last year’s deal included 0.9% APR over a course of 60 months for 2010 Civic, Fit, Accord Crosstour, CR-V and Hybrid Insight models.

Lexus – December to Remember Event

The promotion was from its familiar TV campaign featuring a shiny new Lexus in a big red bow. But last year Lexus focused on lease details for its 2011 models, offering specials on  IS 250 AWD, ES 350, HS 250^th and more. Those looking to purchase could also get 1.9% APR on all 2011 IS 250or IS 350 sedan and the 2011 ES 350.

Chevrolet – Red Tag Sales Event

Chevy uses big red price tags. In 2010 this sale event meant deferred payments for three months if you used their financing, you could get 0%APR and $1500 of the price tag of a car which was billed as “holiday allowance”. HHR, Impala, and Silverado models got the same deals, but without the $1500 discount. Aveo and Cruze models were only offered with differed payments.

Chryslers Year-End Wrap Up

Chrysler offers many deals across the Chrysler, Dodge, Jeep, Ram brands, along with the typical 0% financing and low lease deals. Chrysler has been known to throw in special deals like AWD, 4 Wheel drive and DVD systems for free. It will be interesting to see if there will be any deals on the returned FIAT brand this year.

Note, not all manufactures offer year-end deals those that do generally don’t include all models, like Mercedes Benz only offered incentives on S class sedans last year, all though the deal was great with $10,000 in savings on each car.

To find a good car deal, approach dealers with flexibility on different cars and see where you can get the best deal, one last thing to remember is resale value. The down side to getting a car at the end of the year is you often get a car that’s already one year old. Cars depreciate with age that 2011 model will be worth less than an identical 2012 model sitting next to it on the lot.

If the last point I made doesn’t bother you too much now is the time to buy a car. Remember you can always drive away with a great deal if you go in with an open mind.

5 Used Cars to Avoid and 5 Better Ones You can Count On.

Auto Manufactures have done a great job on boosting their quality and reliability of their vehicles, buying a used car can still make you panic. You always have to worry about how honest is this seller, and you also want avoid vehicles that have a bad history.

To help buyers with their concerns, Money Watch looked at owner surveys to see which cars they disliked and which ones gave them the most problems. We focused on the 2008 models, this year ranked in the latest dependability study from J.D Power and Associates. Buying a 3 year old car lets you shop after the biggest new car depreciation has hit. Because used car prices have gone up so quickly this year 1 & 2 year old model cars can make worse financial sense than buying new.

To make our list of used car rejects, a car had to get a minimum two out of five in the J.D Power “circle ratings” for dependability. It also had to be ranked below average as a used car by Consumer Reports in its annual April car issue and online car rankings.

Here are our recommendations for used cars to avoid, plus some better alternatives in the same category.

Small Car: Volkswagen Beetle- the Beetle’s cute looks and all around appeal don’t save it from being on the least reliable list. Owners of the 2008 models told Consumer Report’s that they had problems with the climate control system and power equipment, both of which can lead to very expensive repairs. The convertible model is selling for $19,350 on dealer’s lots according to Kelly Blue Book website.

Alternative: Hyundai Elantra- Hyundai has remarkably strong sales year for new cars this year. Even in 2008 the company was making quality cars backed by a 10 year warranty, 100,000 mile powertrain warranty. The Elantra got the maximum five circles in the J.D Power reliability ratings and ranked an above average used car by Consumers Reports, survey responders reported no major problems. This Elantra is selling for $12,435.

Midsize Car: Volkswagen Passat- Volkswagen strikes out again. Despite having good reviews when new, the Passat gets a minimum J.D Power two circles and a below average rating for Consumers Reports. Problems with the Passat are problems with the fuel, electrical and climate systems and the power equipment. The 2008 Passat is selling at dealers for $ 19,515.

Alternative: Ford Fusion- Ford’s first real competitors in years against mid-size leaders Toyota Camry and Honda Accord, the fusion won the reliability award in this year’s J.D Power survey. Consumers Reports give it a much above average used car rating. There were no reported major problems with the 2008 Fusion. Dealers are offering the Fusion for $17,365.

Midsize SUV: GMC Acadia- All though the quality has improved in recent models, the 2008 Acadia is a loser in this category. With the minimum two circles in the J.D Power survey, it gets a worse than average used car ranking from Consumer Report’s. Some Reported problems with the suspension and audio system. The Acadia SLE model is selling for $25,000 at dealerships.

Alternative: Toyota 4 Runner- This 2008 Toyota stalwart won the J.D Power reliability award and is rated much better than average as a used car in the Consumer Reports ratings, there were no major problems reported with the 2008 4Runner. Reviewers praise its capability both on the highway and off road. The 2008 4Runner SR5 version is selling for about $27,730.

Large SUV: Ford Expedition- If you need large capacity and hauling and can ignore the bad mileage (the Expedition gets 12 MPG city and 18 MPG highway) Look elsewhere. The big SUV’s of Fords line up gets the minimum two circles from J.D Power and a worse than average Consumers Report rating. Reported problems were with the transmission and audio system.  The used 2008 Expedition is selling for about $23,530 in the XLT version.

Alternative: Toyota Sequoia- In a category with no winner, the Toyota entry again looks like the best bet. It gets four out of five circles in the J.D power rating and an above-average rating from Consumer reports. The Reviews praise its roomy seating and comfortable ride for long highway trips. The 2008 Sequoia SR5 version is selling at $31,265.

Minivan: Chrysler Town & Country- Chrysler originated the minivan and in most years has sold more than other companies. But sometime in 2008 manufacturing quality started to lag.

The Chrysler minivan got the minimum two circles from J.D Power and much worse than average used car rating from Consumer Reports. Problems people listed with this minivan were the suspension, brakes, and climate system and power equipment. The 2008 Town & Country LX version is going for $16,000 at used car dealerships.

Alternative: Toyota Sienna- The Sienna wins the reliability award for minivans from J.D Power, amd gets a better than average rating from Consumer Report. Buyers praise its comfort and seating; it holds up to eight people. The Sienna CE version is going for an average of $20,130.

Despite Toyota’s recall problems and lagging sales this year, its dominance of numerous categories in three years old used cars is a reminder of what a strong record of reliability it had achieved. Domestic companies certainly should not count out Toyota as a strong competitor.