The best months to buy a new car are typically October, November, and December, as dealers clear out current-year models and meet year-end sales goals, with December often offering the biggest discounts but less selection. Other great times include the end of each quarter (March, June, September), holidays like Black Friday, and even the slow month of January for lingering inventory deals and lower foot traffic.
The FTC Red Flags Rule requires auto dealerships to have a written Identity Theft Prevention Program (ITPP) to detect, prevent, and mitigate identity theft, especially in financing/leasing, by spotting signs like suspicious documents (altered IDs, mismatched photos), inconsistent application info, or unusual account activity, with consequences for non-compliance including hefty FTC penalties and lawsuits, notes the Federal Trade Commission. Key steps involve identifying vulnerable accounts, spotting specific "red flags," creating detection/response plans, training staff, and regular audits, with a senior manager overseeing the whole program, say Dealertrack and Total Dealer Compliance.
Tuesdays and Wednesdays are particularly good days to shop because the dealership is typically quieter, and salespeople may be more willing to negotiate to make a sale.
Keeping Transportation Costs Under 10%
For the 10 in the 20/4/10 rule, it is advised to keep your transportation costs under 10% of your monthly income. Transportation costs include your monthly car payment, insurance, fuel, and maintenance.
Used cars will have more wiggle room for the final price, such as up to 20 percent off the sticker price. New cars have less room for negotiation, but you could still reasonably ask for 5 percent off the manufacturer's suggested retail price (MSRP) as a starting point.
Let's look at some things to keep under your hat while you explore the lot.
For years, dealerships have been using a tactic called a “four square”—a sheet of paper divided into four boxes where the salesperson will write down your trade value, the purchase price of the vehicle you're buying, your down payment, and your monthly payment.
The average APR on a loan for a new vehicle dipped to 6.6% in November, the lowest point of 2025. Edmunds analysts expect that downward trend to continue into 2026. Lower rates could help monthly payments, but only for shoppers with strong credit. For many buyers, the relief may feel modest.
Worst Times
Key Takeaways
Putting down at least 20% on a house is the wisest move—it keeps you from paying private mortgage insurance (PMI) and saves you thousands in interest over time. If you're a first-time home buyer, a 5–10% down payment is okay—but be ready for a higher monthly payment with PMI tacked on.
Dave Ramsey's core car buying rule is to pay cash for a reliable used car, avoiding debt and new car depreciation; he suggests only buying new if you're a millionaire, and generally, the total value of all your vehicles shouldn't exceed 50% of your annual income. His philosophy emphasizes buying what you can afford outright, viewing cars as depreciating assets that shouldn't trap you in debt.
The Nine Worst Things to Do at the Car Dealership
A little preparation, and knowing some of the common car dealer tricks used by salespeople, can help you close on a car with confidence.
Unfortunately, it isn't an exact science because it changes from car to car and dealer to dealer. However, you can use the guideline of 2 or 3% on less expensive brands, and 5 to 10% on luxury brands as a rule of thumb.
The best months for car discounts are typically October, November, and especially December, due to year-end clearance, sales quotas, and the arrival of new model years, with the final days of December often yielding peak deals as dealers rush to meet targets. March is also strong for quarterly sales, and the end of any month or quarter offers potential savings as salespeople push to hit goals, so late December through January is prime time for the best deals.
Looking ahead to 2025, we expect to see more of these financing and cash offers and even stronger lease deals, as automakers work to maintain sales momentum. MSRPs are unlikely to fall, but the average new car selling price will drop due to big incentives. This is highly likely for the new cars with the most inventory.