While some car-buying tips end up being old wives’ tales, there is plenty of data to show that buying at the end of a model year can yield big savings on popular models. Car dealerships only stay in business if they can continue moving inventory, and they can’t do that with a bunch of older model-year vehicles sitting on their lot. While every situation is different, waiting until the end of a model year might save you a significant amount of money. Here’s why.
- Inventory management: Dealers have limited space and funding, so they can’t hold on to older model-year vehicles for long. Even if the new version is remarkably similar to the old model, car dealers will be eager to move existing inventory to make room for the freshest new cars.
- Automaker incentives: Automakers want dealers to sell the latest models, and often offer significant discounts and other incentives on prior-year models, which are passed down to the buyer. You’ll sometimes see 0% interest finance deals and discounts off the MSRP, and there may also be cash-back incentives or lease deals available. You may also get a better price for your trade-in.
How Much Can You Save?
It’s impossible to put a fixed number on year-end discounts because every automaker, dealer, and vehicle is different. More in-demand cars and even specific trim levels might have fewer discounts, while a very similar model gets a much deeper cut.
That said, dealerships gain more wiggle room with pricing as they approach the end of a model year, which can make it easier to negotiate deals and extras, such as all-weather floor mats and paint protection.
Don’t be afraid to shop around, including outside of your immediate location. Sometimes, you can find great deals by expanding your search radius. Out-of-state dealers may also be a good option, but you’ll need to be comfortable traveling to pick up the vehicle or having it shipped.
Drawbacks of Buying at the End of the Model Year
You can get a good deal by waiting out the model year, but there are some downsides to doing so.
- Resale value: A new car becomes a used car the moment you sign the paperwork and drive it off the lot. Even though it’s still relatively new, the car becomes one model year old as soon as the new one comes out, which can impact your resale value in some situations. Buyers look at model years and often want the newest one they can afford, even if your slightly older car has fewer miles.
- Outdated design: Automakers introduce new technologies and update designs between model years, and you could miss out on some of the latest features by buying a year-old model. Still, the cost savings likely outweigh the lack of new features for many buyers.
When is the Best Time for You to Buy a Car?
Editor’s Note: We have updated this article since its initial publication.
