Buying a Car: Should I Consider Last Year's Model?
If you're thinking about buying a car, you may have realized some of the best deals are on "leftover" models -- cars that carry an earlier model year even as newer models arrive at dealers. A 2013 model may be steeply discounted once 2014 models arrive, for instance. So what are the benefits and drawbacks of buying one of these cars? We've listed a few to help you understand if you're making the right decision.
Benefit: Lower Price
One obvious benefit to buying a leftover model is a lower price. Since dealers want last year's cars gone as soon as possible, they have much more room in negotiating prices. Choosing an outgoing model year means you'll leave the dealer with more money in your wallet.
Drawback: Lower Resale
While many buyers think a lower price on last year's model is a great thing -- especially if the model hasn't been updated for the new year -- they often forget about resale value. Since a leftover car is already a model year old, it's automatically worth less than a car from the latest model year. That means the lower price you'll get may be immediately negated by a lower resale value. For drivers who keep their cars a long time, this won't be a big issue.
Benefit: Higher Trade-in Value
Since dealers are eager to sell earlier models, it's likely that they'll negotiate more in every aspect of the deal -- including your trade-in. As a result, you'll probably get more money for your trade-in if you buy last year's model. Combined with a lower price, that means you could pocket a large savings by choosing an outgoing car.
Drawback: Body Style Changes
It's one thing to buy last year's model when the car in question is largely unchanged for the new model year. But if you're considering a 2013 model when the 2014 version is all-new, we strongly suggest you think about whether that's what you really want. Your new car will be instantly outdated, meaning we only suggest doing this if you get a great deal -- or if you really prefer the old body style compared to the new one.
Choosing last year's model isn't always the right decision; however, some buyers swear by it. If you're buying a car, it may be worth considering if the benefits of a great deal outweigh the negatives of lower resale value and potentially an outdated car.