Are end-of-year car deals actually a good time to buy? – Money sense

We spoke with Dan Park, CEO of Clutch, who recently released his product annual used car price report. We wanted to know what’s changed in car prices this year and what customers should look out for when trying to get a year-end deal. In short: are you getting a good deal or is the sale a bit of slick marketing?

The state of used car prices in 2025

Like most things, the price of used cars went up in 2025, with the average cost of a used vehicle reaching $33,718 – 4.6% higher than the previous year. But there’s a little more to the price than what you see on the sticker.

As the Clutch report shows, there are actually many individual models rejected in price, but other factors pushed the overall average of used cars up. These factors include a move to larger vehicles, more expensive equipment and electric vehicles, all of which can make it harder to discover real discounts.

If you’ve held out for a good deal until the end of the year, keep in mind that prices drop month by month as the year comes to a close. As Park notes: “The first step [to finding a deal] is comparing price to comparable cars of the same year, make, model, mileage and condition – not just whether it has been discounted.”

Related: Should you buy a new or used car?

What to consider before going to a dealer

It’s easy to feel overwhelmed by the options when you step onto the lot, so reduce the stress these choices bring by doing some research. First, develop a realistic budget and identify models for that price. It also helps to learn what mileage is reasonable based on a car’s age.

Some dealers make important information, such as price context, vehicle history and inspection data, very clear to shoppers. Park says, “…buyers can focus on whether the car itself meets their needs, rather than divulging details later.”

While you’re narrowing down the options, don’t overlook the hidden vehicle costs, which can vary significantly. We’re talking insurance premiums, fuel economy, maintenance needs and possible repairs for the car you’re interested in.

Plus, it’s easy to forget that obtaining financing before selecting a car can make the entire process easier. When you shop for a car loan and get pre-approved, you’ll be less focused on monthly payments and can instead look for a car with a high overall value.

Improve your credit score
One of the best things you can do to ensure you walk away with the best deal on a car is to have an excellent credit score. If your score could use some work, focus on paying off debt and making payments on time in the months before you purchase a vehicle. This way you get the best possible interest rate when financing a vehicle.

Money Saving Strategies for Buying a Car

We’ve already highlighted some simple steps you can take to save money before heading to a dealer, but once you get there, keep these strategies in mind:

• Be flexible. Park says: “Be open to different body styles, such as sedans instead of SUVs or trucks, or to variations in trim level, color or optional features [which] can reduce costs without sacrificing reliability or performance.”
• Expand your search beyond your hometown. Prices for vehicles can vary widely and stock levels at dealers can also fluctuate. You can get a good deal on a car in a neighboring town that you would miss if you only looked locally.
• Investigate common concerns or problems. Before purchasing a car, read up on the common complaints or repair issues the model may be known for. In some cases these may be minor, but if owners find expensive repairs once the car reaches a certain mileage, it may be more cost effective to choose another car.
• Choose a used car with a warranty. You’re more likely to get a really useful warranty from a car manufacturer than from a third party. So if you’re considering a used vehicle that still has some of the manufacturer’s warranty left on it, it could save you money in the long run.
• Read contracts carefully. You don’t want to pay for add-ons you didn’t know you were getting, so take as long as you need to read the purchase agreement before signing it. If there are things in the contract that you don’t want, don’t hesitate to report them.

Should you wait until 2026 or buy an end-of-year model?

We posed this question to Park, who said, “Waiting doesn’t necessarily lead to better results.” After all, car prices have less to do with the calendar and more to do with shifts in supply. So as dealers try to clear space for new models, chances are you’ll get a good deal.

Ultimately, if you’re looking for a car, the best time to buy is when you see an improvement in price for the type of car you want to buy. “If it suits your needs and budget, it is often better to act with confidence than to wait for the perfect moment.”