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Should you buy a car for Christmas?

When gifting and car-buying collide

Published: December 11, 2014 02:00 PM

With the holidays fast approaching, families are scrambling for the perfect gift idea. The pressure is on to step it up each year, and there are few things more grand than a new car.

Few households can give a gift as lavish as an automobile. But if you are considering one, the holidays can be a reason to splurge.  A car can be a great gift theme, with other family members contributing satellite-radio service, all-weather mats, and other accessories.

Season’s savings

Looking at the numbers, December has the highest average transaction price of the year for new cars, with TrueCar showing $31,146. (August has the lowest, at $29,296.)

Prices seem to be skewing higher this year, as seen in our analysis of Black Friday deals. In previous years years, Black Friday brought tremendous savings, but this year, the discounts were more modest and less frequent. This trend will likely spill over to the year-end deals, which we're scrutinizing now.

The recent harsh weather in many regions, coupled with lower gas prices, will likely result in increased consumer interest in all-wheel-drive vehicles and SUVs. Those factors will influence pricing and availability in those segments and ultimately drive up the average transaction price. But you can still find great deals.

As December and 2014 wind down, expect dealerships to be pushing inventory to capture any available manufacturer backend incentives. Likewise, the sales staff will be looking to hit their numbers and come away with some extra cash for the holidays.

We're already seeing discounts on the finance front, as automakers look to drive showroom traffic with low interest rates and attractive lease deals. For those who finance, and have good credit, these offers can be particularly attractive. Just make sure you negotiate a fair price ahead of finance discussions to ensure you get the most for your money, rather than stumble into a payment-based purchase that is blind to the big picture costs.

To get that price, be sure to be armed with the full facts and figures, available via the car model pages on ConsumerReports.org and through the Consumer Reports Build & Buy program.

Shopping tips

When shopping for a gift, it is natural to want to indulge in a fun model or up-level trim features. Generally, features that add comfort and convenience enhance the ownership experience—and would be a welcomed treat for the recipient. (Go over the top and you may run into reliability risks and heightened depreciation.)

But don’t forget to place a priority on road-test performance, safety, and predicted reliability —all factors considered in making a Consumer Reports recommendation. Simply put: Get a good car.

And with the discounts available, you can do so at a great price. Maybe the dealer will even wrap the car in a big red bow.

Jeff Bartlett

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