Auto sales took a dive last month, but the red hot industry shouldn’t worry too much. There’s still the rest of the holiday season left to move wheels out the door!
Only six nameplates had sales gains last month
According to NPR, Hyundai-Kia, Subaru, Tesla, Jaguar Land Rover and Mitsubishi were the only name plates to enjoy sales gains during October 2016.
Among the American nameplates, Ford sales took the heaviest hit and were down roughly 12% last month. That performance was followed by a 10% decline in sales for Fiat Chrysler. GM, meanwhile, suffered the least as its sales only fell nearly 2%.
That slow sales actions could mean deals for you as we move through Christmas.
What about year-end sales events?
Most manufacturers go on a blitz with their ‘End of the Year’ sales events between Christmas and New Year’s Eve. But is it really a good idea to lease at that time?
There are essentially two times in every calendar year when you can get a deal on a car: During a change of model year in August and during a change of calendar year in December.
When the end of the year rolls around, there’s a particularly big push for leasing. But leasing makes sense only in certain circumstances:
- You plan to lease for less than four years
- You have good credit
- You drive fewer than 12,000 to 20,000 miles each year
For the most part, leasing is a disaster for you. Edmunds.com has new numbers that tell the story. Basing their calculations on a car that sells in the mid $20,000 range, they’ve estimated leasing will cost you $6,000 more than buying the car new. That loss goes up to over $10,000 vs. buying a gently used version of that same car a couple of model years old.
When you get on that lease treadmill every two to four years, each time you’re taking on an obligation and you have nothing to show for it at the end. Each time you take on 100% of the loss in value of the vehicle for the time you drive it. That’s why Clark is almost never keen on leasing a car.
There are only two exceptions to his ‘no leases’ rule. The first is if you like new wheels every two or three years. The second has to do with fancy luxury cars, electric cars and some other alternative fuel vehicles. These kinds of cars don’t get discounted, but you will find factory-subsidized leases that can be a deal. (You’ll know it’s a factory-subsidized lease when you see a manufacturer’s ad on TV or a website telling you it’s such.)
With increases in car reliability, it’s entirely possible that you might keep a car 10 years without breaking a sweat. So buying and holding onto a car is a far better strategy.
Read more: 10 of the most reliable cars you can buy