It’s the most wonderful time of the year – if you’re on the lookout to buy a new car, that is. And it’s a great time to get cash for used cars, to use toward a newer model or even a brand new vehicle. Here is why.

Many automakers each November or December launch a “red tag” sale, or other incentives to boost sales as the new model year begins and before the holiday season when most families are focused on smaller purchases.

If you were thinking about getting some cash for used cars, or just selling your one used vehicle to position yourself to purchase a different car, the timing couldn’t be better.

Couple the cash gain from selling a used car with an incentive or special program offered by automakers, and you could be surprised at what kind of deal you can get buying a used car or even a new model.

While automakers arrange red-tag sales and other incentives at the end of each year, this season they seem to be competing even harder due to terrible new-car sales figures in October.

Sell a Used Car and Parlay the Earnings into a New Vehicle

So where are these deals? To start, think of General Motors, Ford and Chrysler, as the Big Three American automakers have suffered most in the economic downturn and have struggled to compete with Asian and European small- and mid-size car manufacturers.

General Motors was primed to begin its annual “Red Tag” sale at the start of November, with lower pricing and cash back for most of its new models. Usually the sale starts later in the year but General Motors moved it up to boost sales.

Chrysler will push incentive programs that mean cash rebates up to $6,000, and discounted financing on remaining 2008 model year vehicles.

Ford is even offering special programs for its smaller cars, even though they are selling better than most of the rest of its fleet. The Ford Focus currently carries manufacturer discounts through early November.

In many areas, you can get a 2009 Focus sedan with a manual transmission for less than $14,000 after cash back of more than $2,000. Ford also offers zero-percent financing for 36 months in many instances.

These are but a few examples of what’s out there if you were contemplating selling a used car or seeking cash for used cars to help exchange what you have for what you might want more.

Couple Incentives with Cash from Selling a Used Car

Some of the current special deals are regional. In Arizona, for example, auto dealers are offering deals that include up to $10,000 back on some vehicles, and zero-percent financing.

Even Toyota has tinkered with zero-percent financing, and some luxury brands are lowering prices. Nissan’s Sentra and Versa have $750 and $500 cash-back deals or financing rates below 5 percent.

AutoWeek on Oct. 20, 2008, listed some of the best deals. Among them:

• On a 2008 Volkswagen Touareg 2, get a $6,000 to $8,000 factory-to-dealer incentive on a new vehicle incentive on a vehicle with a manufacturer’s suggested retail price of $40,000.
• For a 2008 Ford F-450 Super Duty, with an MSRP of $40,660, you can get $7,000, cash back or 0 to 3.9 percent financing.
• Get $8,500 to $9,500 cash back, or 0 to 1.9 percent financing, on a 2008 Lincoln Mark LT suggested to retail at $39,565.
• A 2008 Mercedes-Benz R-Class with MSRP at $45,475 can come with $7,000 to $9,000 factory-to-dealer incentive.
• You can get $7,000 to $8,000 cash back or 0 to 1.9 percent financing on a 2008 Lincoln Navigator priced at almost $50,000.

Think about cash for used cars that you could generate, or the payment for selling a used car, and how you might be able to tag that onto one of the incentives mentioned above to get yourself into a fine new, or almost new, car.