The ‘Magic Week’ To Buy New Cars Is Coming, But There’s A Catch

The so-called ‘Magic Week’ is the time of the year when dealers are so desperate to get rid of cars that they’ll sell them for a loss. Is this a real thing? It can be, although there are all sorts of variables at play this year. Inventory is up, and sales are down, which is usually the perfect recipe for scoring a great deal.

There’s always a catch, right? The Internet loves a catch-y headline, and this time, for this Morning Dump, I’m going to go through all the catches. There’s the obvious one, which is that the best way to get a good deal is to have a lot of money in the first place. There’s more to it, though, as I’ll explore today.

You know who is super-reliant on China? The entire nation of Germany, and now issues with getting rare earth metals and magnets are hitting European companies hard. Germany has a plan, though, and it’s to walk back the 2035 EV mandate, which seems to play into the hands of Chinese automakers that want to sell EVs there.

It’s not just Europe that’s looking askance at Chinese automakers, as BYD just launched a much cheaper alternative to the popular plug-in hybrids in Japan.

The Good Deals And Not-So-Good Deals Will Depend A Lot On Where And What You Shop

While no rational person should expect to suddenly get a great deal everywhere on a super popular car like a Toyota Sienna or Honda CR-V, there’s some logic behind the idea that from December 26th to January 1st, you might be able to get your lowest price/best incentives on a new car.

Some of this is the market overall, as the year is expected to end with a thud, as Cox Automotive points out:

“The new-vehicle sales pace had been expected to slow in the fourth quarter, and that’s what we are seeing,” said Cox Automotive Senior Economist Charlie Chesbrough. “The headwinds from higher prices and fewer government subsidies for electric vehicles are finally slowing the market after a surprisingly strong previous six months. Sales began surging in the spring as buyers rushed to market to beat expected higher prices in the wake of announced tariffs. Now, with more tariffed products replacing existing non-tariffed inventory, prices are drifting higher, leading to slower sales which may last through the remainder of the year and into next year.”

As the Detroit Free Press reports, there is logic behind ‘magic week’ as well:

Overall, most car shopping experts and car dealers expect automakers to offer sizable incentives to move metal in December. General Motors has already started offering big discounts on Chevrolet Silverado pickups.

Likewise, many car dealers will negotiate more aggressively to get sales over the finish line to hit year-end targets. In fact, Tyson Jominy, vice president of data and analytics at J.D. Powers, said the best days this year to buy a new car will be Dec. 26 through New Year’s Eve. He calls it the “magic week” for car buying. Eric Frehsee, president of Tamaroff Auto Group, confirmed Jominy’s prediction.

“Dealers will lose money to sell cars at the end of the year,” Frehsee told the Detroit Free Press. “There’s all kinds of goals and targets to hit and no one wants to fall short.”

You probably can’t just call up your local dealer and ask them how close they are to their yearly target, so you’ll have to look a little closer at what you want. As referenced above, Chevy is putting a lot of might behind Silverado this year, and for good reason. Not only is it a high-margin, profitable vehicle, but Ford is in trouble.

Specifically, it may not be the best time to get an F-150 because the plant that processes the aluminum for F-150 production keeps catching on fire for some reason. This means deals for the Ford truck might be harder to come by, whereas Chevy wants the killshot of outselling the F-Series for a quarter, or at least the company wants to make Ford sweat a little.

As mentioned, the ongoing affordability catch is also there. While lending is loosening up a little bit, your best way to get a deal is to have great credit in order to negotiate lower financing on shorter terms. If you can afford a 48-month repayment and can put a lot of money down, you’ll ultimately pay less over the course of the loan than someone who has a higher interest rate and can only afford a much longer term.

Is there any upside here for buyers? Sure, if you’re a Costco member and have been for a while, there are a bunch of $1,250 incentives on GM or Polestar products.

As you can see in the chart above, there are also deals to be had in certain segments. Do you want a mid-size sedan? Sales are down, so maybe a deal on a Camry or Accord isn’t so far out there as a concept. Do you want a Nissan Altima? No. No one wants a Nissan Altima. However, the deals for those are probably going to be excellent depending on where you live.

The other place to look is for vehicles and automakers impacted by tariffs. This is probably a bad time to score a good deal on a European-built car, as European brands are looking to protect profitability.

So, yeah, deals are out there, but it’s going to depend more than usual on the brand, the vehicle, and the geography.

European Automakers And Suppliers Looking At Supply Chain Disruptions

The un-flattening of the world is starting to continue apace, especially with China’s Ministry of Commerce putting stricter export controls on its rare earth minerals and magnets. These materials are key to making all sorts of advanced goods, and the Chinese government is fully aware of this dependence. After a year of governments questioning their reliance on China and implementing trade barriers, China is responding by increasing bureaucratic hurdles.

A new survey by the European Chamber of Commerce points out just how tough this is:

Delivery times for impacted goods have been disrupted, with 40% of respondents indicating that export control approval processes have added upwards of two months to delivery times. A similar proportion (38%) expect ‘significant’ disruptions to their supply chains, or production stoppages or slowdowns, if all of China’s announced export controls are fully implemented.

[…]

“China’s export controls have increased the uncertainty felt by European businesses operating in the country, with companies facing risks of production slowdowns or even stoppages,” said Jens Eskelund, president of the European Union Chamber of Commerce in China. “They have also prompted strong responses from China’s trading partners, which has added more pressure to a global trade system that was already under a great deal of stress.”

The EU recently passed high tariffs on Chinese-built EVs, over the protest of the German government.

Germany: Let’s Maybe Chill On Those EV-Only Mandates

German Chancellor Friedrich Merz would very much like it if the European Union didn’t keep its 2035 EV-only mandate, reports Bloomberg:

“Our goal should be a technology-neutral, flexible, and realistic CO2 regulation that meets the EU’s climate protection targets without jeopardizing innovation and industrial value creation,” Merz wrote in the letter, which reached von der Leyen’s office on Friday and was seen by Bloomberg.

Merz’s letter demands far-reaching changes to von der Leyen’s original plan to ban combustion engine vehicles by 2035. “We must consider the emissions of the entire passenger car fleet — that is, new registrations and existing vehicles,” Merz, the leader of Germany’s conservative CDU party, wrote.

The European Union is adoping EVs at a way faster rate than the United States, and even there the idea of getting rid of all combustion-powered cars without some sort of huge advancement seems difficult. I mean, one way could be lowering tariffs on Chinese cars and allowing that country’s automakers to sell a bunch of cheap EVs in Europe, but that’s even worse for German automakers.

Merz himself got elected partially on a promise to kick the economy back into gear which, in Germany, requires selling and building more cars.

BYD’s Sealion 6 Is Going To Challenge Japan’s Best

The BYD Sealion 6 is, visually, one of the least interesting vehicles for sale right now. From a technological and geopolitical standpoint, however, it’s fascinating. The BYD plan, besides selling EVs outside of China, seems to hinge on selling plug-in hybrids.

While tame, visually, the Sealion 6 is competitive on range and features with both the Toyota RAV4 Prime and Mitsubishi Outlander PHEV in Japan. On price? It’s not even close. The Sealion 6 will sell in Japan for about $25,600 for the FWD model, compared to $36,500 for a RAV4 and $34,100 for the Outlander. Even the AWD Sealion 6 is just $28,900 or so.

Will Japanese buyers go for it? There’s a reason why they may not, as Nikkei Asia reports:

The debut takes place with relations between Japan and China worsening. Japanese Prime Minister Sanae Takaichi said in parliament that an armed attack on Taiwan could become “a survival-threatening situation” for Japan. In response, Beijing has taken a series of measures, including urging its citizens to avoid traveling to Japan.

In a group interview on Monday, Tofukuji said there has been no significant increase in canceled orders. “We have not received requests to cancel from customers awaiting delivery. Customers are observing the situation calmly.”

He also said the company has not received any requests to cancel Monday’s news conference from either the Japanese or Chinese governments.

“We cannot predict how bilateral relations will develop, going forward, and there is no major impact at this time,” he said. “But if such a relationship persists into the future, it is natural that concerns will arise.”

If the People’s Republic of China invades the Republic of China (Taiwan) it’s a scary moment for Japan, but the quesiton is how much Japanese buyers are influenced by geopolitics.

What I’m Listening To While Writing TMD

Will we end the year strong? The Counting Crows see “A Long December” coming.

The Big Question

What’s the best new car deal in your area?

Top photo: Silverado