If you're a retiree in the market for a new car or truck and you have good credit, you’re in luck; you can leverage that to potentially score a deal.
That doesn’t mean it will be easy — tariffs and higher interest rates are making it more costly to purchase a new vehicle — but it can be done this holiday weekend and beyond.
“Retirees can absolutely leverage their strong credit to capitalize on Labor Day car sales,” says Carol Pope, senior writer for auto and personal loans at LendingTree.
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“Carmakers often offer cash incentives and promotional 0% APR or low-interest financing on certain makes and models, especially during Labor Day. But to take advantage of these deals, you have to be a ‘well-qualified buyer.’ In other words, you need good credit.”
What your high credit score can get you
Well-qualified buyers in the eyes of car dealers, lenders and manufacturers are those retirees with a credit score of 720 or higher, steady income, a low debt-to-income (DTI) ratio, a history of making on-time payments and a sizable down payment.
Retirees who check off all those boxes tend to get better rates on their car loans. It also puts them in a better position to negotiate with car dealers because there is little risk they'll be denied a loan.
If your credit score is 781 or higher, even better. That's what's needed to get the best rates available.
Now that you know the power of your high credit score, here’s how to use it to your advantage
Shop around for your new ride
A lot of research goes into selecting a new vehicle to purchase, and once you decide the make and model, equal time should go into shopping for the best price.
Don’t just walk into the first dealership and drive out with a new vehicle. It's important to shop around to compare the deals and incentives different dealerships are willing to offer.
Keep in mind that your ability to get a deal on the vehicle depends largely on supply and demand. If it's hot at the moment, such as compact and midsize SUVs, you won’t be able to haggle, says Joseph Yoon, consumer insight analyst at Edmunds. But if it's sedans, which aren’t as popular, dealerships might be more eager to get them off the showroom floor.
“Most retirees and older folks are trying to get cars that are comfortable and have higher seating positions and are easier to get in and get out of, and that’s compact SUVs and midsized SUVs,” says Yoon. “They are hugely popular with everyone else, so there’s really no incentive for dealers to give $1,500 off when the next person who walks in the door will pay sticker price for them.”
Electric vehicles: The outlier
One type of vehicle you might be able to haggle for is an elective vehicle, says Yoon. The federal government’s tax credit of up to $7,500 on EVs is ending on September 30, 2025, which is expected to put a dent in sales, resulting in excess inventory.
“Dealers are very willing to move these vehicles, especially before September 30,” says Yoon. “Everyone in the market for a car who lives near enough to EV charging infrastructure or has a garage where they can plug their car in every night should at least take a look at an EV.”
There are also numerous state and local tax credits for EVs that are stackable with the federal credit.
If you're considering an EV, you should also look into leasing, as many dealers are incorporating the tax credit into EV lease deals. The EV site Electrek keeps a running list of deals nationally.
Shop around for your car loan, too
Shopping around doesn’t only pertain to the dealer from whom you purchase a car. It should also be the lender you use to finance the car.
Pope advises getting pre-approvals — three or four — by lenders and using the lowest interest rate as leverage when negotiating with dealers.
“Wait until the dealer gives you an out-the-door price on the car, show them your preapproval and ask if they can beat the rate,” says Pope.
Don’t be afraid to say no to any extras when negotiating the financing terms, either. One of the tactics financing managers use is to wait until the end of the process — when you might be too worn out to push back — to tack on more features, such as paint and fabric protection, "ding" protection or other extras, says Pope.
If the service or warranty is one that you truly think you’ll use, Pope says go for it, but otherwise, say no. Better yet, try to get them for free.
“These add-ons typically get rolled into the car loan, where they will accrue interest,” says Pope.
Finally, you might be able to benefit from the new car loan interest tax deduction. If you hope to get this deduction, do your homework first, as not all models or borrowers qualify.
Can cash be a negotiating tool?
If you’re thinking about paying cash, it might or might not help you in negotiations.
Often, finance companies incentivize the dealers to have their customers finance car purchases. They're more willing to take money off the sticker price for someone who finances and pays interest than someone who pays cash, says Yoon.
“Don’t mention you’re a cash buyer right away. Dealerships make money by setting people up with financing,” adds Pope. “They might bump up the cost of the car or tack on additional products to offset the loss they may take with a cash deal.”
Cash might get you a lower price, however, if the dealer is motivated to get the car off the lot.
If you're paying cash, ensure you understand the tax implications if the money is coming from a 401(k). Those withdrawals are taxed as ordinary income, and depending on how much you withdraw, they could push you into a higher income bracket.
“Once that money is out of the investment account, it will no longer grow. In fact, they’ll be putting it toward a depreciating asset (a car),” says Pope.
Buy when you are ready
While Labor Day sales, tariffs and low inventory on certain vehicles might all seem like valid reasons to act now and purchase a new car, ultimately, the timing should be when you’re ready, not because of something in the market.
There is never a perfect time to act, other than when you need or want to.
“If you’ve done your research, you have a general idea of what you want, then we’ve been advising people it's the right time to buy,” says Yoon.
“Don’t worry about the things you can’t control; focus on getting ready (to buy a car) instead of waiting for a break in your favor.”
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