End-of-Model-Year Car Buying Tips You Need to Know
Suppose you want the most bang for your buck when buying a new automobile. Purchasing near the end of the manufacturer’s current model year can save you hundreds or even thousands of dollars while still giving you the satisfaction of driving off the lot in a brand new car.
Buying a car at the end of a model year could be helpful. If you don’t need the most up-to-date technology and are seeking a good bargain on a new vehicle that isn’t the most up-to-date, you’re in luck. Buying near the end of the model year comes with a slew of benefits, so keep reading to see how to get your hands on one of these fantastic car deals.
What is an End-of-the-Model-Year New Car?
When vehicle manufacturers release a new model year, dealers are often stuck with “leftover new cars” from the previous model year that they need to get off their lots. This is why it’s so common to see advertisements for “model-year-end clearance” sales.
Buying a car at the end of a model year can be an intelligent choice, and it is one of the best times to buy a new car, but only if you do your car-buying research and go into the process well informed. Not sure where to begin when shopping for leftover new cars?
I’ve got some advice worth keeping in mind as you prepare to head to the dealership.
1) Know When to Go Car Shopping
First, understand that there is no universal “end of the model year,” as production cycles can vary from one auto manufacturer to the next. Don’t fall into the mistaken assumption that the end of a vehicle’s model year will fall in line with the end of the calendar year, as this is not often the case.
Instead, you’ll be better off doing some independent research; the best way to figure out when the end of a model year is approaching is to research the release date for the following year’s model.
For example, if a car you’re interested in has a new model release date for November, you would probably be at the most significant advantage to shop for leftover new cars of that model sometime in October.
In most cases, you can expect a new model year to start around late fall or early winter. It is rare for a new model year to release in the spring or summer, but it’s not entirely unheard of, so be sure to do your research.
You will also want to keep in mind that new car rebates and incentives will become more prominent as the year closes. However, your car selection will become limited as well. The manufacturer’s and dealers’ objective is to sell and remove the remaining leftover automobiles from the previous year’s inventory.
2) Consider Your Needs When Buying a Leftover New Car
While it may be impossible to know exactly where you’ll stand this time next year, let alone several years from now, it’s a good idea to look to the future when considering buying an end-of-model-year car. That’s because, depending on how long you plan on having the vehicle, it may or may not be worth the savings to buy a leftover.
For instance, let’s say buying a 2022 model year of one car will save you $2,000 on your purchase compared to a 2023 model of the exact vehicle. However, because you like to buy a new car every few years, your 2022 model may have a significantly lower resale/trade-in value than a 2023 model (possibly several thousand dollars lower).
As a result, you may have saved some money on your vehicle up-front by buying at the end of the model year, but you ultimately would have saved more by purchasing the newer model year and trading it back in or selling it for more down the road.
3) Research and Prepare Before You Go Car Shopping
If you’re considering buying an end-of-model-year car, take time to assess and determine your own needs before heading to the dealership. You should decide on what type of budget you’re working with and whether or not you’ll need to arrange auto financing.
If you plan on applying for financing, what type of down payment are you comfortable with putting down? Suppose you have some specific makes and models in mind. In that case, it can also be a good idea to check with a few online auto insurance carriers and get a few free online insurance quotes so you can better understand how much you’ll be paying each month for coverage.
You may also want to list “needs” versus “wants” in a new car. It may be worth saving a few thousand dollars if you can check off most (if not all) of your “wants” with a leftover new car. However, if you don’t get all the features or the car you want, it may be worth passing on an end-of-the-model-year vehicle.
4. Take Advantage of Discontinued Models
A little online new car research will generally tell you whether or not a particular discontinued model for the following year. If you already have your heart set on a specific vehicle, then be sure to determine whether it will continue to be in production.
If not, and if there is still a relatively high demand for that vehicle, you might end up paying more for the car than if it was not discontinued. This is basic supply-and-demand economics at work, unfortunately.
On the flip side, if you’re still set on a particular make and model of car that’s being phased out, you’ll want to act quickly and buy while the inventory is still available.
5) Watch Out for Demos or Loaners
When you shop for a leftover new car and see a price that seems too good to be true, ask whether or not the vehicle is previously used as a demo or loaner.
These are vehicles that the dealership may provide to service customers to borrow when they’re having work done on their cars. As a result, they may have higher mileage on them.
If you notice while test driving that the number on the odometer seems higher than you would expect for a new car, don’t hesitate to ask; the dealership legally must disclose this to you.
Generally, you’ll want to avoid buying a loaner or demo car because these cars have been registered since the dealership obtained them. As a result, you won’t have as long remaining on the warranty as you would if you bought a new, unregistered vehicle.
6) Keep an Open Mind
Leftover new cars often sell for so much less than recent models because they’re just that: leftovers. You may find that the end-of-model-year vehicles left on the lot are not in your favorite color, or they may be an unpopular trim level that didn’t sell successfully throughout the year.
Simply put, when you shop leftover new cars, there’s a good chance you won’t end up with the exact color, trim, or features that you want. With this in mind, you should go into the buying process, so you’re not disappointed.
On the other hand, if the car you’re looking at lacks a specific feature that you wanted, it can never hurt to try and negotiate with the dealership. If they’re desperate to move the vehicle off their lot, they might be willing to install that must-have feature for free or at a heavily discounted price.
7) Know When to Walk Away
Knowing when to walk away from a vehicle negotiation that just isn’t working out is also essential. When it comes to buying an end-of-model-year car, you’ll especially want to be on the lookout for the “bait and switch” tactic.
This common technique occurs when a dealership advertises a leftover new car at a seemingly too-good-to-be-true discount. Once you arrive at the dealership, you find out that the advertised vehicle has already sold but that another option is available that’s just a little more expensive.
This “bait and switch” tactic is unfair and even illegal in some states. Either way, it’s a sign of an unscrupulous dealer, so it’s best to walk away and take your business elsewhere.
8) Plan Your Purchase Wisely
When it comes to negotiations, did you know that the time and day of the week you visit the dealership can make a big difference? Think about it. Most car salespeople are paid commission, so they’re naturally going to want to help customers willing to spend the most money on a new car.
If you visit the dealership on a busy weekend, there are likely to be numerous customers who are looking to spend more on a new model year car. As a result, salespeople may be less likely or willing to work with you.
On the other hand, if you visit the dealership during a less busy time of the week (such as a weekday during “normal” work hours), you’re likely to end up with a salesperson who is eager to make a sale and thus more willing to go above and beyond with negotiations.
9) Never Pay More Than MSRP
One of the best pieces of advice to remember when shopping for any car, including a leftover new car, is never to pay more than the listed sticker price.
Even if a car seems to be “loaded” with extra features, paying more than the sticker price means they’re taking advantage of you, and your vehicle will likely depreciate well under that price as soon as you drive it off the lot.
10) Don’t Lose Out on a Great End-of-the-Model-Year Car Deal
While you certainly don’t want to rush into buying a new car if you’re not ready, it’s also worth bearing in mind that leftover new cars tend to fly off lots pretty quickly due to the heavy discounts that come with them.
As a result, if you come across a vehicle you like and have already taken the time to research and test drive, you don’t want to pass up a good deal. It’s generally wise to go shopping for leftover new cars with the idea that you’ll be prepared to buy the same day if you come across the right vehicle.
Unfortunately, that car may have already been purchased by somebody else if you take a day to “think on it” and return to the dealership.
Overall, buying a car at the end of its model year can be an intelligent financial decision. Buying an end-of-model-year vehicle not only saves you money but allows you to revel in that new car smell all the same. And by keeping these practical tips in mind as you shop for leftover new cars, you’ll be able to shop, negotiate, and ultimately buy confidently.
Be a Savvy Leftover Car Shopper
The number one tip for saving the most money when buying a new or used car is always to take your time and “DO YOUR RESEARCH FIRST!”
I recommend using a trusted, well-established online referral service such as Ryde Shopper, Edmunds, Motor Trend, and Cars Direct before physically walking into a car dealership. Their free online price quotes will automatically help level the playing field with the dealer and let you know right away which dealers are willing to be more flexible on price. Please consider them the next time you buy a used car online. They will save you a lot of money.