By Craig Dekshenieks
Translated: Buyer Beware … and Smart
My mother always said, “A real shopper never pays full price.” She was always cutting out coupons and searching the Sunday circulars for upcoming holiday sales. It seems like Black Friday was tailor-made for her. But if you’re not buying groceries or the latest name-brand shoes, when is the best time to buy a product?
A little more than a year ago, I was in need of a new car. My old car’s mileage was well over 100,000 and little things were starting to go wrong with it. I decided to see what I could get on my trade-in and perhaps drive off with a new set of wheels. It was the holiday season of 2010, and with family and work responsibilities, the first time I could get to a dealer was on New Year’s Eve. It was on that day that I stumbled upon the answer to, “When’s the best time to buy a car?”
Most people will tell you to buy a car in the fall when the new models are coming out and the dealerships are trying to sell off the existing inventory. That’s only partially true. On Dec. 31, 2010, for example, dealerships must pay taxes on any 2010 model car that has not been sold within the calendar year. They want to sell as many current model year cars as they can in order to avoid the taxes.
Luckily, I was able to find a 2010 car in a color and model I liked—but the deal got even better. Dealerships have an inventory of “service loaners.” These are the cars they loan to their customers while they are getting their own cars repaired. Technically, these cars are now classified as “used” even though they usually have fewer than 10,000 miles on them and are usually covered with a brand new warranty.
Lastly, the salespeople are willing to make deals to get the current year’s tax-bearing models off the lot. I walked out of there with an essentially brand new car (only had 6,800 miles on it), with a five-year, 100,000-mile bumper-to-bumper warranty, for 35 percent off the original price. Am I a genius? No, I was just lucky. But it got me thinking about other industries, and when might be the best time to buy their products.
The simplest formula to apply here is the age-old law of supply and demand. When the supply is at its highest and demand is at its lowest, that is the time to buy. Unfortunately, gauging supply and demand is often difficult due to artificial manipulation through marketing and popular opinion.
For example, popular opinion seems to say that the best time to buy a big screen television is right before the Super Bowl. Advertisements will flood the airwaves and print media promoting sales and special financing—“Get your big screen today, and we’ll have it installed for free in time for the big game!”
But wait about a month, and that same big screen television will be 20 to 30 percent cheaper. According to lifehacker.com, March is the best time to buy a television because the demand is at its lowest and supply is high, due to all those sets they didn’t sell in time for the Super Bowl.
Popular opinion on when to buy airplane tickets has been manipulated in recent years thanks to the “21-day advance” and “14-day advance” marketing by the airlines. Have you ever wondered why the person sitting next to you paid $129 for his seat, and you paid $239 for yours? Here is how airplane ticket prices really work:
You can book a ticket up to a year in advance on most airlines, but if you are purchasing a ticket right now for a flight in June 2013, for example, you are going to pay the standard, full-price fare. It doesn’t matter that you are booking so far ahead of time. There will be a few people who book their flights months ahead of time, and they will all pay full price as well.
About six weeks before that flight is set to depart, the airlines will start bringing the prices down in order to stimulate demand for that particular flight. For some of the more popular destinations, such as San Francisco to Los Angeles, they might not have to bring the price down, depending on how full the flight is at that point.
For most flights, prices will come down until tickets start selling. At that point the prices will start to go up again. This is the reason why some fares are dirt cheap a week before departure, and others are astronomical. Again, it comes down to supply and demand.
The website farecompare.com offers the following insights on ticket prices:
n Wednesday is the cheapest day to fly; Tuesday and Saturday are next cheapest. The cheapest times to fly are early morning, during lunch or on an overnight “red-eye” flight. Mid-morning and mid-afternoon to evening are the most expensive.
n The best time of day to actually purchase a plane ticket is at 3 p.m. (EST) on a Tuesday.
n The best time on the calendar to purchase a plane ticket is 43 days prior to scheduled departure.
So, for your sister’s wedding on the other side of the country in June 2013, look to purchase the ticket on a Tuesday afternoon in mid-April, and try to depart on a Wednesday.
Buy in the Off-Season
For gadget items such as laptop computers, iPhones and iPads, figuring out the best times to buy is a very simple solution, but it can often be a tough sell for all you techno-geeks out there. Much like new model cars, the best time to buy a gadget is when the next generation of that particular gadget comes out. In other words, the best time to buy the iPhone 3 is the day the iPhone 4 hits the stores.
Techno-geeks absolutely must have the latest and greatest. It’s understandable, especially when the new model has the QXF45GS operating system, allows you to access ancient hieroglyphics when you happen to stumble across that Egyptian tomb in your backyard and it might even allow you to climb Mt. Everest in virtual reality while chatting live with a Sherpa. Sorry, but the old model just doesn’t have those features.
Unless you absolutely must have the latest toy, the truth of the matter is, the current generation gadget (that you don’t have) will allow you to do all the things you’ve only dreamed about until now. In fact, demand for older model gadgets is at an all-time high in foreign countries where any technology is a step up for most people. A person in China will buy your iPhone 2, and you can purchase the iPhone 3. And you can let the guy in the IT department buy the iPhone 4.
This advice works well for many other products as well. Buy your gas grill in January or February (it’s the off-season). And if you’re worried that in the spring, when demand is highest, the new models will come out and upstage your months-old backyard barbeque, ask yourself, “How much better can a gas grill get?”
Looking to join a gym? Don’t join in January with all those other resolutioners! Wait until June, when you can really wheel and deal with that muscle head membership director named Magnus.
There are plenty of sources you can turn to for help when it comes to finding out the deals. Just make sure you are going to a truly independent source. Remember to stick to the law of supply and demand, and don’t get swept up in the marketing hype. If everyone is buying a product right now, you can bet they are paying full price, and remember what my mom said about that!