End of year new car deals likely to stretch into 2016

December is customarily the best time to buy a new car.

The conventional wisdom says dealers are ready to do sharp deals as the year ends because they have annual sales targets to meet, with hefty bonuses attached.

It can sometimes make sense for a dealer to sell a car on the lot at below cost to collect a bonus.

But one senior multi-franchise dealer we spoke to thinks January may be just as good a time, if not better, to search out a deal.

"I think there are going to be a few more deals available in January (than December)," he says.

Toyota, Hyundai and Mitsubishi are tipped to run big "demo" sales in January

Blame the anomaly on the Federal Chamber of Automotive Industries, which allows makers to report cars as sold when they don't have buyers.

This leads to a glut of "demonstrator models" the following month. "There's going to be a whole lot of reported stock still available in January," the dealer says.

It will depend to an extent on the brand you're looking at — Toyota, Hyundai and Mitsubishi are tipped to run big "demo" sales in January.

"Some brands are going to have hundreds of cars on the grass by then and they'll have to support the dealers," he says.

He thinks other makers are likely to be dragged into the discount war.

"If you don't have a deal in the small-car market, for example, you're going to get clobbered," he says.

Normally, buying a "plate clearance" model, built in the previous year, hurts you at resale time but he believes the January savings will be good enough to cover the loss.

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