Car Buying

Buying a Car: Can You Get a Better Discount Buying New or Used?

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author photo by Doug DeMuro July 2015

If you're interested in buying a car, you might be wondering whether you can get a better discount if you get a brand-new vehicle or a used model. It's a good question, and you'll hear a lot of opinions on both sides. But what's the truth? Are new cars better deals (as dealers try to sell them off to meet automaker sales targets)? Or can you get a better deal on a used car (which dealers don't like to have on their lots for long periods of time)? We have the answer.

What Determines Discounts?

Before we answer the question of whether there are better deals available on new cars or used models, it's important to understand exactly what determines a discount.

On the used-car side, discounts primarily relate to how long a car has been on a dealership's lot. I once worked at a car dealership with a large used-car business, and our pricing strategy was to offer very few discounts for the first 30 days a car was on the lot, some discounts for the second 30 days and big discounts between day 60 and 90. After 90 days, the car was usually sold at a wholesale auction to make room for a different used car that might have a better chance to sell.

With new cars, the strategy is a little different. A 2016 model that arrives in June 2015 is still a new car even in January 2016 -- so there isn't as much pressure to sell it right away. But if that same model is still at the dealer when the 2017 models start to arrive, the pressure is turned up dramatically. New cars can also get bigger discounts if a manufacturer is running a special or an incentive to help increase sales and bring down supply.

It Depends on the Car

With all that established, it's now easier to understand that there isn't a magic answer to the question of whether new or used cars offer a better discount. On the contrary, you'll find that it very much depends on the car itself.

For instance, a used car with a lot of interest may not offer any sort of discount at all, while a new car at the end of the model year might come with a lot more wiggle room in the price -- and some major manufacturer incentives. Meanwhile, a new car that just came out will likely offer little in the way of discounts, while dealers will be very flexible on the price of a used car that's been on the lot for a while.

So our advice to shoppers interested in buying a car is this: If you want the best deal on a new car, buy it at the end of a model year. If you want the best deal on a used car, wait until the dealer has had it for a while. But don't forget to keep in mind the very real possibility that it might sell while you're waiting.

This image is a stock photo and is not an exact representation of any vehicle offered for sale. Advertised vehicles of this model may have styling, trim levels, colors and optional equipment that differ from the stock photo.
Buying a Car: Can You Get a Better Discount Buying New or Used? - Autotrader