Where the deals are for Black Friday car shopping

  • While zero percent financing deals are harder to find, some automakers are offering them as part of their holiday sales events.
  • Getting that rock-bottom rate will likely be harder to find as interest rates rise.
  • Consumers should also compare prices and incentives among individual dealerships.

If you're thinking the long holiday weekend would be a great time to shop for a new car, here's a tip: Do your homework before heading out.

While Black Friday and holiday sales events come with special deals, they can vary greatly among automakers and dealerships. And with cash incentives slowing and zero percent financing offers harder to find, the more legwork you do, the more likely you are to find a good deal.

Dealers are typically eager to sell in November to clear current-year models off the lot and help close out the year with the strongest sales possible. And although you might find even lower prices on some 2018 models closer to the end of the year, the selection could be more limited.

Vehicles sit on display for sale on the lot of the dealership in Los Angeles, California.
Bloomberg | Bloomberg | Getty Images
Vehicles sit on display for sale on the lot of the dealership in Los Angeles, California.

"If you need or want a particular vehicle, the inventory might not be available later in the year, depending on what you're looking for," said Matt Jones, senior consumer advice editor for auto research firm Edmunds.

Some automakers have temporarily revived zero percent financing for well-qualified customers — i.e., those with really good credit scores. For instance, General Motors is offering the rate for 72 months (six years) on popular models including the Chevy Silverado 1500 pickup truck. Ford, Hyundai and Nissan also are offering the bottom rate on certain models for limited times.

However, such financing deals will likely become fewer and farther between, thanks to rising interest rates. Since late 2016, the Federal Reserve has raised a key rate seven times to prevent the economy from overheating and has signaled that the next hike will come in December. Those increases push the cost of borrowing higher for a variety of consumer loans.

New-car financing

Loan element
October 2018
October 2017
October 2013
Term 69.12 months 69.19 months 65.66 months
Monthly payment $542 $516 $477
Amount financed $31,200 $30,866 $27,605
Interest rate 6.21 percent 4.95 percent 4.19 percent
Down payment $4,063 $3,966 $3,652
Source: Edmunds

Just 3.8 percent of autos financed in October came with that rock-bottom rate, according to Edmunds research. That's down from 5.7 percent a year ago and marks the lowest it's been since 2007.

Incentive spending by dealers — such as cash-back deals — also are down a bit. J.D. Power estimates October's average was $3,742 per auto, down $143 from $3,885 a year earlier.

At the same time, both the average price of a car and the cost to finance it have been rising. In October, new-car buyers paid an average of $32,947 for their new ride. And the interest rate on car loans reached an average of 6.2 percent last month, the highest since January 2009, according to Edmunds.

Whether or not you think you'd qualify for the best deals, it's worthwhile getting preapproved for a loan before heading to the dealership, Jones said. While you might get offered better terms by the dealer, it's good to have the backup loan just in case.

And if, like many buyers, you're considering a pickup truck or SUV — 70 percent of sales in October were for those types of vehicles — remember that they tend to get lower gas mileage than sedans and other smaller autos. While gas prices are relatively low right now, consumers should remember that they're a moving target and could become more expensive down the road.

"While you're making the decision, just make sure you'd be able to afford a spike in gas prices," Jones said.

More from Personal Finance:
Black Friday shoppers: Avoid this dangerous habit
40% of the American middle class face poverty in retirement, study concludes
Here are your new income tax brackets for 2019

Subscribe to CNBC on YouTube.