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Buying a Car: How Much Discount Can You Get at the End of a Model Year?

If you’re interested in buying a new car, you’ve probably heard the advice to wait to buy until the end of the model year before making your purchase. The theory behind this advice is that dealers will give out more significant 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 really can get a better deal on a new car by buying it at the end of the model year. And the reasoning is correct, too. 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. 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 2022 model is coming, an automaker may offer 0% interest to entice buyers to choose 2021 models before the 2022 version arrives. Other incentives common at the end of the model year include good lease deals and cash-back offers. Find a new car for sale near you

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 2021 model or a new 2022 model at the end of the 2021 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 2021 model as a year older than a 2022 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 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.

RELATED STORIES: Buying a Car: Should You Buy at the End of the Month?

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 seek, but your car will be worth a little more when it’s time to sell it or trade it in.

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Editor’s Note: This article has been updated for accuracy since initially published.

Doug Demuro
Doug DeMuro writes articles and makes videos, mainly about cars. Doug was born in Denver, Colorado, and received an economics degree from Emory University in Atlanta. After graduation, Doug spent three years working for Porsche Cars North America. Eventually, he quit his job to become a writer, largely because it meant that he no longer had to wear pants. Doug’s work has been featured in a... Read More about Doug Demuro

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