December 8, 2010

New Car Prices Lower in August

The other day I talked about New Car Prices.   When I made that article I also ran a chart of the prices monthly without seasonally adjustment.   That chart is below:

You will notice that the line bounces up and down in a regular cyclical pattern.   If you plot the seasonally adjusted figures then you don't see that wavy up and down pattern.   So this up and down movement of auto prices from month to month  is a seasonal and cyclical pattern.   Lets zoom in a bit on the latest 10 years:

In this chart I've added vertical gridlines to help show the regular annual pattern.   Every year the prices start at a low point in August and then go up and then go back down.

Looking at the charts it would appear that August is the best time to buy a new car based on the seasonal cyclical change in prices.   I wouldn't conclude it as a fact, but just an interesting pattern I observed.

The site Car Buying Tips says that there are two "best" times to buy new cars.    They say that December is a good time to find end of year bargains while most people aren't shopping.   They also say that July to October when "as new car dealers sell off cars at low prices to clear space for new car models".   That second time period coincides with the low point in August.

Its also possible that the prices go up and down based on peoples buying patterns.  Maybe people buy cheap cars in the summer for some reason and expensive cars in the winter.   I don't know for sure that the prices of the cars are lower in August, but the amounts people pay are at least lower.

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