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December 2, 2011

News & Features

Time, deals make the week after Christmas a big time to buy

USA Today

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Amber Barnett helps customer Evonne McGuire as she checks out a Fiat 500 at a Fiat dealership in Austin, Texas. Late December is a peak period for auto sales. (Erich Schlegel / The New York Times)

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A prize wheel was set up for customers at the Gary Lang Auto Group dealership in McHenry, Ill., during last year's holiday sales. (Peter Wynn Thompson/The New York Times)

Despite ads showing a brand-new car (complete with big red bow) in the driveway on Christmas morning, one of the biggest sales periods of the year actually comes after Santa has headed back to the North Pole.

Many auto dealers do up to 70 percent of their December business in the week after Christmas, says James O'Sullivan, CEO of Mazda North America. Some don't even bother to advertise much until right before Christmas, recognizing that it would be hard to get most consumers' attention, he says.

"December is not the biggest selling month of the year," says O'Sullivan, but Dec. 26 to Jan. 1 is the "most intense selling week of the year."

Several factors make the post-Christmas/pre-New Year's period a bountiful one for the car business. One of the biggest is that many people are off work and kids are home from college, so there's time for families to shop.

"In the car business, weekends are our big-volume days," says Shaun Del Grande, whose California dealership chain sells brands including Honda, Toyota, Subaru and Mazda. From Dec. 26 through Jan. 1, though, "Every day is like a weekend."

Car shopping tips
  • Looking to buy once the presents are open? Here are a few tips to keep in mind:
  • Stay in the shopping mood. Get quotes from several dealers for the model you want. You can do this in person, but if you do it via email you'll have a written record and more time at home with your family.
  • Start your post-holiday diet later. Try not to negotiate or sign anything when you're tired or hungry. You're more likely to miss the fine print or to stop negotiating so you can go home.
  • Shop for financing before banks close for the holidays. The dealer might offer the best loan, but you won't know for sure until you check around. Getting insurance quotes may also be more convenient before staffers go on vacation and offices close.

There's also pent-up demand among consumers who have held back on big-ticket purchases the past few years, says James Bell, executive market analyst at Kelley Blue Book. And many people know that "at the end of the month, dealers are a little more willing to wheel and deal." Those hoping to get a tax deduction for a new model bought or leased for business also may be rushing to buy before the end of the year, Bell says.

People are clearly still in the mood to shop after Christmas. Kathy Grannis, spokeswoman for the National Retail Federation, says Dec. 26 is among the busiest shopping days of the year, and the week after Christmas can account for up to 15 percent of holiday sales for non-auto retailers.

Luxury-car sales often get a big bump in the post-Christmas week if the stock market gets a boost from strong retail sales. Luxury-car buyers typically own the most stock outside of their retirement programs, says Paul Taylor, chief economist for the National Automobile Dealers Association, and are likely to feel more confident in big-ticket purchases when the markets are up.

Although the incredible deals of 2008 and '09 are over, carmakers are still providing sales and incentives. Japanese automakers, trying to recover from production slowdowns after the March earthquake and tsunami, are offering some of their best deals ever.

"It truly is the 'perfect storm,' " Del Grande says. "It's like our version of Black Friday, but we get it for a whole week."

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