Pros and cons of buying a car in December

There are many pros and cons to buying a car in December, according to insurance company Naked.

Ernest North, cofounder of Naked, said there are compelling arguments either way when you are looking to buy a new vehicle.

“The most obvious reason to wait if you’re buying new is that you’ll be able to buy a 2022 model, which massively affects your resale value. But that’s not the only factor to consider,” said North.

Naked provided their list of arguments for and against buying a new car in December, below.

The pros

The arguments for buying a car in December are:

• Pick up a bargain – many car dealers are under pressure to meet targets and move stock off the floor before it’s devalued by the ringing in of a new year.
• Use a bonus as a deposit – if you’re getting a 13th cheque, you could use it towards your deposit.
• Potential for lower insurance – buying a 2021 model now means a lower insurance premium than driving a 2022 model.
• Buy a 2022 model in 2021 – you can often, but not always, buy a car in December and only register it in 2022 to improve the resale value.
• Car prices may rise in 2022 – as car manufacturers make their 2022 models available, they’ll inevitably hike the prices.

The cons

The arguments against buying a car in December are:

• Good deals early in the year – if you’re considering a used vehicle, many private sellers are under pressure early in the year and might offer an attractive price to secure a sale.
• Clearer view of your financial situation – if you’ve splashed out on an expensive holiday, your financial resources may be under pressure.
• Remote work – your employer could decide to extend work-from-home policies, or the government can introduce new restrictions to manage Covid-19.
• Rising petrol price – you might want to hold on if you were going to buy a petrol-guzzling SUV. Take the time to think about whether you really need it.
• A car isn’t an investment – paying off debt or keeping your money in an interest-bearing account is almost always smarter than buying a car.