If you’ve ever shopped for a new car, you’ve probably heard the advice to wait until the end of the model year before making your purchase. The theory behind this tip is that eager dealers offer more discounts as they clear lots for next year’s model.
But is this advice really accurate? Can you get a better deal by buying a car at the end of the model year? And if so, how much? We have the answers.
Benefits of Buying a Vehicle at the End of a Model Year
The advice you’ve heard is correct — you often can get a better deal on a new car by buying it at the end of the model year. And the reasoning is also accurate. Here’s why.
- Clearing inventory. Dealers want to sell cars no matter what, but they will be eager to clear out their “last year’s model” inventory when a new model year is right around the corner. Even if a car isn’t redesigned or significantly changed for the new model year, dealers will always find it easier to sell “next year’s model” than last year’s because buyers are excited about new features or a refreshed exterior. Dealers will be more willing to give out discounts on remaining inventory as the model year comes to a close.
- Available incentives. Additionally, manufacturers often provide incentives on outgoing model year vehicles to clear them off dealer lots. For instance, if a 2025 model is coming, an automaker may offer 0% interest to entice buyers to choose 2024 models before the 2025 version arrives. Other incentives common at the end of the model year include good lease deals and cash-back offers.
How Deep Are Year-End Discounts?
Too many factors are in play for a one-size-fits-all answer regarding year-end discounts. It depends on the manufacturer, the model, and even the model’s trim level. Take a look at our Best Deals compilations, and also check the carmaker’s website for year-end rebates, incentives, and financing specials.
Dealerships have significant pricing flexibility with their remaining stock. Shop around because a dealership 50 miles away could have more cars on its lot and be more willing to offer steep discounts than the dealer closest to you.
Pro tip: Don’t be afraid to shop out-of-state, but pay attention to the fine print on advertised discounts because they sometimes have geographic eligibility restrictions.
Drawbacks of Buying at the End of the Model Year
Although you’ll get a better deal by buying a car at the end of the model year, there are some drawbacks you might want to consider before signing the papers.
- Resale value. Once you drive the last year’s model off the lot, the car is considered a year old even though it’s a new car to you. This may hurt your resale value when it comes time to sell. Let’s say you had the choice between a discounted 2024 model or a new 2025 model at the end of the 2024 model year. At the time, both cars were brand-new vehicles sitting on the dealer lot. But when it comes time to sell, buyers will view your 2024 model as a year older than a 2025 vehicle — and you’ll have to price it accordingly. The result is that depreciation may take away some of the money you saved when you were buying the car in the first place.
- Outdated design. Another drawback: If you buy a car at the end of the model year when a new design is right around the corner, your vehicle’s design will be instantly outdated. You also may lose out on some new technology and features only offered in the newer model. While this probably won’t matter to some buyers, other drivers prefer to have their cars be on the cutting edge, so they’d rather spend the premium for the latest model instead of choosing the outgoing one.
Which Choice is Right for You?
Whether or not you should buy a car at the end of the model year depends on your plan for vehicle ownership. If you’re purchasing a vehicle that you plan to own for several years, we suggest that you buy the car at the end of the model year. You’ll save money, and the depreciation and potentially outdated design likely won’t matter to you.
However, if you replace cars every two or three years, we’d suggest waiting for the new model year. Not only will you get all the latest features you probably desire, but your car will be worth a little more when it’s time to sell it or trade it in.
Editor’s Note: This article has been updated since its initial publication.
