MONEY Autos

Check Out This Revolutionary Car Buying Advice—Then Disregard It

steering wheel with clock in it
Valerie Loiseleux—Getty Images

Consumers have been told that everything car-buying experts have been advising about the best time to buy a new car is wrong. So what's the right approach now?

Earlier this summer, the car-buying research site TrueCar offered some stunning insights concerning car prices throughout the year. The takeaway from the numbers seemed to throw the conventional wisdom of when to buy a new automobile on its head. August, TrueCar data revealed, “has historically shown to have the lowest average transaction price of the year at $29,296.” After analyzing data from 2009 to 2013, the site concluded that consumers in August paid $716 less for a new car compared to all other months and declared that August may very well be “the best time of the year to buy a new car.”

What’s more, the numbers showed that Sunday is “typically the best day of the week to buy a new car,” with transaction prices that were $1,402 lower than the daily average, and that “the first two days of the month are the best time to shop for a new car,” because prices on those days represented an “average $390 in savings over the remaining days of the month.”

If you’ve ever read an article on the best time to buy a car, you’ll know that these tips basically spit in the face of the consumer expert consensus on the matter. For instance, a fairly boilerplate post from Kelley Blue Book offers this advice to shoppers who want to get the best prices on cars:

• Buy around the last day of the month — dealers have monthly sales quotas
• Buy at the end of the year — some dealers will clear out inventory for tax reasons

Meanwhile, analysts at Edmunds.com are regularly quoted saying things like, “December has become one of the best times of the year to buy a new car,” and virtually every article on car buying mentions advice along the lines of: “As you might guess, the end of the month is often a good time to buy a car, particularly if salespeople are trying to meet their quotas or qualify for a monthly bonus.”

What gives? Should we throw out the conventional wisdom on when to buy a car? Well, yes, says TrueCar CEO Scott Painter. “When you look at the real data, you see that you’re almost always better off doing the opposite of what conventional wisdom tells you to do,” Painter told CBS Moneywatch recently. “Unfortunately, much of the conventional wisdom is just wrong.”

The truth, however, is a lot more complicated than what Painter would have us believe. August may be a great time to buy certain kinds of cars, and the first couple of days of the month could be an opportune time to seal the deal. Then again, depending on the buyer and car model in question, those times might not be ideal to get the best price.

Here’s why, despite TrueCar’s seemingly groundbreaking analysis, the conventional wisdom on when to buy a car still holds up—even as TrueCar isn’t 100% wrong.

Let’s start with the business about the first couple days of the month. A representative for TrueCar replied to our inquiry about this issue by explaining via email, “the end of car sales month goes a few days into the next calendar month. Dealers are more eager to sell cars at the end of a ‘sales month’ to reach manufacturer incentive program sales targets for the month.”

In other words, car sales finalized on the first or second day of September generally count for August in terms of the purposes of the dealer’s and salesperson’s tally. So it’s somewhat of a matter of semantics: Yes, you still want to follow the conventional advice and buy at the end of the month—only be sure it’s the end of the dealership’s sales month, rather than the regular old calendar.

Now let’s move on to TrueCar’s data regarding average transaction prices, which are lowest in August ($29,296) and peak in December ($31,146), and what this actually means for buyers. On the one hand, sure, August tends to be a good time to buy because car dealerships are eager to get rid of leftovers from the previous model year and make space for the new, more in demand (and higher priced) models. On the other hand, it’s much too simple to state that the deepest discounts on leftover models take place in August and August alone. “The model-year changeover is another opportunity for a great time to buy,” said Kelley Blue Book analyst Tim Fleming, “but this has generally taken place more in the September-October timeframe rather than August.”

What’s more, the average vehicle transaction price in any month depends a lot on what vehicles people tend to be buying during that month. Fleming explained that December has the highest transaction prices because it’s an especially big month for sales of luxury cars and SUVs. It goes without saying that cars in these auto categories cost more than the average sedan, so when many of them are purchased, the average transaction price increases.

A closer look at the TrueCar data shows that the average incentive (a.k.a. dealership discount) is higher in months such as December ($2,686) and March ($2,746) than it is in August ($2,619), even as August has the lowest average transaction price. How could this be? It’s because the average sticker price of vehicles purchased in August tends to be lower than other months. To a large degree, cars cost less in August because people are buying cars that are cheaper to begin with. It’s not because cars are being discounted by a larger amount.

“Anyone generating an average of transaction prices would be remiss not to consider the mix of models being sold,” the car-buying experts at Edmunds.com said via statement, in response to an inquiry about TrueCar’s advice. “Edmunds.com’s data suggests that historically March has actually had some of the lowest average transaction prices over the past few years, and this is largely due to the types of vehicles that sold during the month.”

Finally, what about buying on Sunday? Let’s defer to some older insights from TrueCar on that matter. “Weekdays are better than weekends,” TrueCar advised car shoppers in 2010. “The fewer people on the lot, the more likely the dealer is willing to make a favorable deal.” TrueCar has also gone on record stating that one particular Sunday—Easter Sunday—is the absolute worst day of in the whole calendar year to get a good deal on a new car.

TIME technology

Taxi Drivers Are Using Apps to Disrupt the Disruptors

Essdras M Suarez—The Boston Globe/Getty Images; Justin Sullivan—Getty Images; Gamma Nine Photography/Uber

Taxis in San Francisco are fighting back through apps, with the city's blessing

Flywheel ScreenshotStanding on the corner of California and Polk in San Francisco, I took out my phone and ordered a ride from Flywheel, an app that’s competing with rival transportation services like Uber and Lyft by leveraging the thousands of taxis already on the road. Like with those services, once I order a Flywheel ride, a map pops up with a car icon, showing me where my ride is in relation to me and allowing me to monitor the driver as he or she gets closer.

Or at least that’s how it’s supposed to work.

On this particular morning, as I watched multiple Lyfts go by (unmissable with their trademark giant pink mustaches attached to the cars’ grilles), and a couple Ubers (the black cars now identifiable by small logos that must be placed on their windows), my driver’s icon drifted away from me. After some minutes passed, I called the driver, who assured me he was on his way. When he continued to travel not towards me, I canceled the order and got a new Flywheel, which picked me up and promptly delivered me to the company’s San Francisco office, with my bill and a 20% tip paid automatically through the credit card I stored on the app.

Once at Flywheel, Chief Product Officer Sachin Kansal explained what had likely happened with my misguided driver. “He may have been ride-stacking,” Kansal explained, meaning that the driver accepted my order on the app and then took a street hail, thinking he could deliver the latter before I ever knew the difference. But the moment I canceled my ride, the driver’s plan was foiled. He would be blocked from the system until Flywheel investigated the case, and these did not appear to be circumstances that would yield quick forgiveness from administrators. Kansal made sure I knew how swiftly justice would be dealt, because this is not the kind of mistake companies can afford to treat lightly in the midst of the Great Ride App Wars.

San Francisco has been transformed into a city full of smartphone-wielding guinea pigs, willing beta testers who try out new services and shovel feedback to engineers. But while many transportation startups are busy dreaming up new and unfamiliar offerings, Flywheel and similar companies like Curb and Hailo are trying to breathe high-tech life into the old taxis that have been around for decades. That business model comes with limitations as well as certain advantages—the biggest of which may be that the city of San Francisco is proving a willing ally, and that could in turn prove a model for other metros. (Lyft did not respond to an interview request for this article, and Uber declined.)

San Francisco’s Municipal Transportation Agency’s “position is that there is a public good to having a regulated taxi industry,” city spokesperson Kristen Holland said in an email. “We want to encourage the public to take San Francisco taxicabs by making them aware of the e-hail option and letting them know the benefits of taking a San Francisco taxicab.”

Earlier this summer, the city and Flywheel teamed up to get their pro-taxi message across by putting cheeky ads like this on the sides of city buses:

Screen Shot 2014-08-15 at 1.35.15 PM

And this:

Screen Shot 2014-08-15 at 1.35.05 PM

By getting its app adopted a whole fleet at a time, Flywheel now has its system in 80% of San Francisco’s approximately 1,800 cabs and is aiming for 100%. Both the city and companies like Flywheel have a financial interest in cabs doing well—Flywheel through the 10% cut it takes off the base fare and the city through its medallion system, which will yield an anticipated $10 million in fiscal year 2015. Holland says that the city also supports cabs because they’re a known quantity. The city regulates them and decides exactly how the drivers are trained. Questions about insurance and liability, which have plagued startups innovating new transportation systems, have long been answered when it comes to cabs.

Taxi drivers, many bitter that they have to deal with more onerous regulations than drivers for companies like Lyft, have taken to writing down license plate numbers of cars with pink mustaches and reporting them to insurance companies. While cabs are clearly commercial vehicles, Lyft drivers are often using their personal cars to make money, and some insurers have canceled Lyft drivers’ policies after finding out they had only forked out for non-commercial plans.

Using apps like Flywheel is a way for taxis to fight fire with fire instead of tattling, however justified it might seem. Flywheel’s Kansal says that drivers may double the amount of rides they get in a shift through the efficiency that the system provides, matching people who need rides with nearby drivers. “There are weaknesses that others have. There are regulations that they may be breaking,” he says. “But 90% of our energy is spent on making sure this experience always stays top notch. That the experience that you had this morning never happens again.”

While Flywheel can’t turn cabs into fancy black cars or Lyft Plus SUVs, customers who order a taxi never have to worry about surge pricing, premiums that other companies charge in times of high demand. And while Flywheel can’t innovate at the speed of the other companies, given the limitations of what a fleet cab can be, it did just roll out service to airports in San Francisco, Seattle and L.A—something less established fleets still can’t legally do in many cities due to long-standing airport regulations. The California commission regulating the new services like Uber and Lyft has threatened to shut them down if drivers keep showing up at arrival and departure areas without proper permits.

Kansal believes his company can outfit cabs in a way that allows them to disrupt the companies that disrupted cabs in the first place. The fleet model is “very scalable,” he says, though the app is now densely present only in San Francisco and available in just a handful of other cities, most on the West Coast. (Competitor Hailo is the leader among taxi apps on the East Coast and in Europe.)

But the equation isn’t so simple as making lists of pros and cons for new ride-providing companies and app-enabled taxis. After my interview with Kansal, I tried to hail a car through Curb, a rival app that just rebranded itself after previously operating as Taxi Magic. After failing to get a taxi assigned to me before five minutes passed by I went back to Flywheel. A taxi arrived, and I asked my driver Casey Callahan what he thought of using the platform.

“I have mixed feelings,” he says. “You get a lot of business you wouldn’t normally get, and it gives us an edge against Uber, but they take a kind of big cut.” Ten percent seemed too high to Callahan, and that’s the kind of resentment that can fester. UberX drivers protested angrily outside Uber’s HQ in San Francisco earlier this year when the company started taking a bigger cut of the fare, many drivers threatening to go work for someone else. Callahan said the Flywheel app can also have technical kinks, and it remains painful to pass up a willing street hail once he’s agreed to pick up a Flywheel customer, the temptation to which my driver succumbed.

Callahan described all the driver-luring and price-cutting companies are doing to one-up each other in the Bay Area as “cutthroat capitalism at it worst.” But he said that if cab drivers don’t use technology and whatever else they can to fight back, they’re going to go the way of the dodo and the stagecoach. “This is going to be one more thing that’s gone from the American way of life,” he says.

He says he chose driving for a cab company over the new services partly because he doesn’t own his own car and feels that buying one through a company, as some Lyft Plus drivers do, is the equivalent of being an “indentured servant.” Myriad factors could send a driver one way or the other. Long-time cabbies know how much they can make in a shift, while newer companies continue to play with prices and what cuts they take. There’s also the ethos of the job, like Lyft’s requirement that a driver fist-bump each passenger, while a cool distance in taxis is the norm and Uber black car drivers will open your door. There are hours, incentives, pride, rules about where certain companies can go and who they can pick up. And so on.

For those championing taxis, the question is whether cab drivers who long roamed without competition, facing no penalty if they ditched one fare for another, can give their industry the kind of customer-service makeover it takes to convince a San Franciscan to order a Flywheel instead of something from the long menu of other options.

MONEY Autos

WATCH: Car Thieves Really Love Hondas

Thieves in the U.S. stole more than 53,000 Honda Accords and 45,000 Honda Civics last year, according to the National Insurance Crime Bureau.

MONEY Autos

WATCH: Ferrari Sells for Record-Breaking $38 Million

A once-crashed 1962 Ferrari 250 GTO sold for a total of $38.1 million at the Pebble Beach Concours d’Elegance.

TIME Autos

A Ferrari Just Sold for a Record Price at Auction

Nets $38.1 million

+ READ ARTICLE

A rare 1962 Ferrari model was sold for $38.1 million in California on Thursday, setting a new record for the most expensive car auction ever.

The 1962 Ferrari 250 GTO Berlinetta, one of just 36 of the cars built in the early 1960s, fell short of some rosy predictions that it would garner in excess of $50 million at auction. But the final price tag from the auction at Bonhams’ Quail Lodge Auction in Carmel, Calif., still easily surpassed the previous record of $30 million for a 1954 Mercedes model sold last year.

“It’s been a genuine privilege to represent this outstanding car and we are absolutely delighted with today’s results,” Bonhams chairman Robert Brooks said in a statement. “We’ve always maintained that we would exceed the current world record and that the car would bring between $30-$40-million and today the GTO did just that.”

MONEY Autos

WATCH: Ferrari Could Sell For Record $50 Million

The Pebble Beach Concours d’Elegance is one of the world's most prestigious car collector shows. This year’s auction could go down in the record books.

MONEY Autos

The Least and Most Expensive States to Drive

Car driving into the Tetons, Wyoming
At least the scenery is great in the state where drivers tend to log in the most mileage on the road, Wyoming. Rolf Richardson—Alamy

Curiously, a state with low auto insurance premiums and fairly cheap gas is named the most expensive in the nation for operating a car.

Bankrate.com released the results of a new study about the least and most expensive states to own a vehicle, and a few of the places featured at the pricey end may seem particularly puzzling. Using state-by-state data concerning driver spending on car repairs, insurance, and gas gathered from CarMD.com, GasBuddy.com, the Bureau of Labor Statistics, and the National Association of Insurance Commissioners, Bankrate researchers found:

• The Midwest dominated the least expensive end of the cost spectrum, with Illinois, Ohio, and Iowa named the three cheapest states. All averaged under $2,000 annually for the trio of car operating costs included in the study, with Iowa the cheapest of all—$1,942, 13% below the national average ($2,233).

• Drivers in North Carolina, California, Washington, D.C., and New Jersey spend the most on repairs, all averaging $390 or more annually. New Jersey has the highest average of all at $393, which is 11% higher than the national average. A few hours north in Vermont, meanwhile, drivers average just $270 in annual repairs.

• Average car insurance premiums in Washington, D.C., New Jersey, and Louisiana top $1,200 per year, which is at least $500 more than a half-dozen other states in the country.

• Several of the top five most expensive states to operate a car may come as a surprise: Wyoming is the priciest overall ($2,705), followed by Louisiana ($2,555), Florida ($2,516), Mississipi ($2,487), and New Jersey ($2,421).

The reason that Wyoming is at the top of the list pretty much boils down to how much drivers pay for gasoline. It’s not even that the state’s gas prices are all that high—drivers in Alaska, Hawaii, New York, California, and Connecticut, among other places, routinely pay more per gallon than folks in Wyoming. Instead, Wyoming drivers pay more annually for gasoline because they tend to drive so much—68% more than the average American. The data used by Bankrate indicates that folks in Wyoming spent $1,588 on gasoline last year, and $1,643 the year before that. In the 2014 study, the state where drivers spent the second highest amount on gas was Alabama, with an average of $1,237. The average driver in Washington, D.C., meanwhile, spent an average of only $618 on gasoline in a year’s time.

Drivers in D.C. don’t get off so easily in other areas, however. The average car insurance policy there runs $1,273 annually, vastly more than premiums in Iowa, Ohio, Idaho, Wisconsin, Maine, and both of the Dakotas, which all average under $700.

What’s more, D.C. drivers are subjected to many costs that aren’t factored in to the Bankrate study, and that drivers in, say, Wyoming, rarely have to worry about. Like parking. A 2014 NerdWallet report about the worst 10 U.S. cities for parking featured Washington, D.C., for its typical costs ($19 per day, $270 per month) and the total amount collected in parking fines (around $100 million each year).

For that matter, the Bankrate study, limited as it is to just three data points, leaves out quite a few of the costs involved in owning a car. Like, you know, the actual cost of the car. Once the price of buying or leasing a vehicle is adding in, along with things like depreciation, maintenance, and gas, the average sedan costs $8,876, according to the latest AAA estimates.

And hey, owning a car in Wyoming is not necessarily as expensive as the Bankrate study makes it out to be. The average driver pays more there because he is on the road much more than his counterpart in Washington, D.C., New York, New Jersey, Nevada, and Pennsylvania, where the averages in annual gas expenditures are all under $800. To some extent, Wyoming drivers are victims of their state’s geography and development—stuff there is far away, what are you gonna do? But unlike in other states, where impossible-to-get-around high auto repair and insurance costs inflate overall driving expenses, at least people in Wyoming theoretically have the power to dramatically rein in the price of having a car, provided their work schedules and personal lives allow it. Just drive less.

TIME Autos

2015 Chrysler 200 Review: The ‘Basic Car for the Basic Consumer’

TIME's Bill Saporito reviews the "basic car for the basic consumer".

+ READ ARTICLE

The 2015 Chrysler 200 is billed by the automaker as “the expression of inspiration”, but TIME Assistant Managing Editor Bill Saporito sees it a little differently.

While the aerodynamics are impressive and are a throwback to earlier models, the car still fails to impress in other areas. Starting at $22,000, the mid-size sedan has a 2.4 liter engine which throws out 185 horsepower. The 200C gives a little more boost, but will also cost you a little more, at $29,000.

A raft of safety features, including lane-drift detectors and blind spot detectors in each mirror, make this a safe and useful everyday car for families, or the “basic car for the basic consumer.”

MONEY Autos

WATCH: Behind the Wheel of the New Chrysler 200

The new mid-size sedan has an aerodynamic design reminiscent of cars from the 1930s — and some powerful engine options.

TIME Autos

General Motors Is Getting Ready to Make a Huge Change

A General Motors Co. 2014 Chevrolet Cruze vehicle sits on the lot at a dealership in Southfield, Michigan, March 28, 2014.
A General Motors Co. 2014 Chevrolet Cruze vehicle sits on the lot at a dealership in Southfield, Michigan, March 28, 2014. Jeff Kowalsky—Bloomberg via Getty Images

The favored fuel of Europeans could be in 10% of US cars by 2020

fortunelogo-blue
This post is in partnership with Fortune, which offers the latest business and finance news. Read the article below originally published at Fortune.com.

By Ben Geier

The word “diesel” probably elicits one of three reactions from most Americans: A disgusted comment about black smoke, a curious glance that says they don’t know what diesel is, or a story about the time they accidentally put diesel in their engine and worried they’d ruined their car.

All that could be changing, though. Steve Kiefer, the General Motors’ vice president who oversees engine production, said in a speech Tuesday that he thinks 10% of the U.S. market could be made up of diesel cars by 2020, echoing past statements from GM executives.

As of right now, only one GM car, the Chevrolet Cruze, is available in the U.S. with a diesel engine. Some heavy-duty pickups are also available with diesel as an option. Several more could be coming in 2016, according to a report onAutomotive News. The Chevrolet Colorado and the GMC Canyon will be available with diesel engines in 2016.

The Chevrolet Cruze diesel will be the first of many diesel-powered passenger cars General Motors will offer in the United States, Kiefer said in his speech.

Lauren Fix, an automotive columnist who goes by the title “The Car Coach,” said she agrees, and that diesel’s image is changing stateside.

“Diesel today is about performance,” she said. “Its a great alternative to a hybrid, because what you lose with a hybrid is towing capacity.”

For the rest of the story, please go to Fortune.com.

 

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