Have you ever thought about how a convertible could be extremely expensive in July, but be a great deal in December? Or have you ever seen all forty-four trucks that get out of the Northeast right after it snows for the very first time?

The used car market is an ever-changing thing that constantly shifts and develops in fresh ways all year long. Knowing the patterns of this market can help you get the most money saved when you buy and sell. Again, seasonal trends drive the automotive industry. 

Although, when looking at such a large country as the United States, winter slumps in Miami can be very different from those in Minneapolis. Everything from weather patterns to tax season to summer vacations can have an impact on the supply and demand throughout the country.

This guide is intended to educate you about the different regional differences in used car pricing; and how differences in climates and cultures affect the value of your used car purchase; thus help you time your next transaction correctly.

Supply and Demand General Rule of Thumb

Starting by looking at some of the trends nationally before going regionally as these trends appear to be consistent across the U.S. The Automotive industry tends to follow a cyclical pattern related to consumer confidence level and cash flow.

Spring Bump

Spring is the busiest time for dealers in most areas across the United States. This season usually sees customers receiving tax refunds during February, March, and April. Because of the influx of money, this will increase demand for cars and create higher prices for used cars.

The Winter Chill:

In contrast, January and February are typically the slowest months for car sales. Consumers are typically recovering from expensive holiday purchases, and because of the weather, many are not physically going to dealership lots to shop for a new car. As a buyer, this can be a great opportunity to find fantastic deals on vehicles.

Northeast-The Battle with the Elements

Weather in the Northeast (New York, Massachusetts, Pennsylvania, etc.) has shaped the seasonal nature of products sold.

Winter is the prime season for SUVs and Trucks

With rising temperatures comes increasing demand for 4WD vehicles. An increase in demand correlates with winter weather warnings.

Let’s say that you’re looking to purchase a F-150 or an Outback in Boston, in November, you would expect to be paying a premium as dealers understand that safety and traction are among the top priorities of the buyers.

Summer: The Season for Convertibles.

On the other hand, you will find it extremely difficult to sell a convertible in January in Buffalo. However, once the sun shines in May, the demand for sports and convertibles increases dramatically throughout the Northeast. The sales opportunities will be limited from May to August.

Ideal Buying Time in the Northeastern United States

• Winter Convertible and Sports Car: December through February.

• 4WD Truck: June through August.

Southeast Region: Land of Endless Summer

The Southeast (FL, GA, Carolinas) is in an entirely different cycle than the rest of the country. Due to the lack of severe winter months, "snow-ready" vehicles are not in as great a demand as in the Northeast.

The Consistency Factor

There is less contrast between types of vehicles sold in the Southeast because of the more temperate weather year round. In Miami, for example, you can sell a convertible in December as easily as you can in July. Winter is frequently called "convertible season" in Florida because in the summer, the weather is just too hot to drive with the top down.

Effects on hurricane season

Hurricane season is a unique influence on this situation (the months from June through November).

• Storm Impact on Market: If a storm significantly damages the market, it will create a sudden spike in demand for vehicles, causing prices to jump in the affected area.

• Market Investment in Flood-Damaged Cars: Consumers should also be aware of the potential for purchasing flood-damaged vehicles marketed as 'too good to be true.'

  
  

The Midwest: Basic, Functional

The Midwest (Ohio, Illinois, Michigan, Minnesota) has similar winter weather conditions to those of the Northeast but is more likely to have a cultural attachment to domestic trucks/SUVs.

"The Winter Beater" Market

Midwest markets possess a unique "winter beater" segment that purchases lower-cost used automobiles to manage all the road salt and snow and keeps their main vehicle safe from winter damage. Each fall, as winter approaches, prices tend to rise for cars under $5,000 as consumers look to secure a vehicle for winter driving.

Seasonal Patterns in Agriculture

The Agricultural Cycle affects truck sales in the rural Midwest. There is generally an increase in truck sales and upgrades during October and November when farmers cash in their harvests, which in turn affects local inventories.

Two Different Climates are Found Along the West Coast

The West Coast is unique as it consists of elements associated with the wet region of the Pacific Northwest, Washington and Oregon, as well as the dry zone of the Southwest consisting of areas such as Southern California and Arizona.

Northwest Pacific (NWPT)

The NWPT is dominated by Subaru and Jeep brands. Due to the high rainfall in this area, AWDs tend to have higher resale values than other vehicles, and there is really no off-peak season for selling AWDs. Just like the Northeast, however, the values of recreational summer cars drop considerably during the gray, rainy winter months.

Southern California and Southwestern United States

This area is known as the birthplace of today's automobile culture. Similar to Florida, weather does not play as large a role in price changes for convertible vehicles. However, the price of gasoline has a significant effect on this geographic area.

Gasoline prices in California are usually amongst the highest in the country during the summertime because of the state-mandated fuel blends; this causes values of Hybrid, EV, and Prius vehicles to be very high, while values of V8 and other high-gas consumption vehicles may decrease substantially.

Other Factors More Than Just the Weather

Although the main factor affecting seasonal trends in the used car market is the weather, several other events on the calendar also play an important role.

1. Tax Refund Season (U.S. National)

Many Americans receive their Tax Refunds from Late Winter through Early Spring. That’s why automotive dealers stock up with a lot of inventory starting in January anticipating the upcoming influx of cars sold by the public in February and March.

• Insight: If selling, sell your used vehicle inventory during this time frame to obtain maximum dollar amounts.

2. New Vehicle Launches (Late Summer/Fall)

New Models come onto the market for sale beginning with Late Summer/Early Fall. Once this occurs, the previous year models must be sold at "Clearance Prices". Once Customers begin to Purchase New Vehicles, a large number of Used Cars will be available for trade back into the Automobile Dealers, thus causing a lower Used Car Market Supply in October and November.

3. End of Month/Quarter/Year

Dealers have sales targets they must meet. This is especially true for new cars, but used car managers also have sales targets. At the end of December, many dealers will be working hard to meet their sales quotas and will offer attractive pricing on both new and used vehicles.

Regional Data Analysis: Pricing Differences

Let's break down how seasonal pricing changes for the different types of vehicles across regions using two examples: a four-wheel drive pick-up truck and a convertible.

The Pros & Cons of Market Timing

Market timing has the potential to be a profitable way to "beat" the market; however, it comes with inherent risk. Below are some pros and cons of waiting for the “ideal” time.

Advice on Vehicle Purchasing and Selling

Buyers

You must be patient. If your Jeep Wrangler is in Chicago you should wait until April & May instead of purchasing it during the month of November. In doing so, you will not have to pay the premium associated with purchasing the vehicle during the snow season.

Shop Outside Your Local Market. Thanks to the proliferation of online auto dealerships, there are now online car dealerships allowing customers to buy cars from anywhere in the country. You may find that you can save money on your new four-wheel-drive truck when purchasing from Texas or Florida versus buying locally in Maine during winter months and paying the same amount for shipping services associated with your purchase.

If You Are a Seller

Be prepared to wait if you're trying to sell/ trade a highly seasonal vehicle. A dealer will likely lowball you when he knows he has to carry that inventory for months until it becomes selling season.

For example, if you own a minivan or a regular commuter sedan (e.g., Toyota Camry, Honda Civic), they are affected more by the school year and tax-time than by weather conditions. The best months to sell a used vehicle in those categories are typically August (back to school) or April/May (tax refunds).

The Contribution of Online Stores

Retailers are starting to homogenize price points nationally somewhat by accessing inventory from all over the nation. They are taking advantage of the regional pricing differences via shipping and moving inventory.

As an example, an online retailer in New York might purchase a convertible at a low price in January and ship it to Arizona in order to immediately sell it for a profit. This allows consumers to purchase vehicles that are more competitively priced than the local dealership and other private sellers in the area but still be impacted by seasonal fluctuations in the industry.

Final Thoughts

The price of used cars is determined by several different components: depreciation, state of repair, and odometer readings. Applying a seasonal component to that price determination allows you to maximize on both ends of a transaction.

Residents of the Northeastern and Midwestern States should respect the seasons and weather. Rotating their fun vehicles bought during the winter months (snow) and work-related vehicles (sun) throughout each year is the most feasible purchasing strategy.

When you know the rhythm of your market, you stop being a victim of the economy, and you make it work for you. Whether you want a cheap car to use during the winter months or you want to sell your car for top dollar during the summer months, knowing how the calendar will help you use it to your advantage.