Model Year End. A Good Time To Buy?
The Big “D”
Depreciation is a fact of life in the automotive world. When new model year vehicles hit the dealerships all preceding model years take a hit in value. One reason automakers offer great deals this time of year is because last year’s models are depreciating as they sit on the lot. For dealers and manufacturers this provides plenty of motivation to move those vehicles. Unsold inventory costs dealers real money and when next year’s new models start arriving they start pushing hard to minimize the overhead. Depreciation can be a big factor for buyers, too. It’s generally understood that new vehicles depreciate the moment you drive away from the dealership but “year end” models may see some additional depreciation, at least initially, because they’re already considered to be a year old in terms of book value. Year-end pricing and incentives should help offset this factor and if you plan to keep the vehicle for a long time, depreciation probably won’t be an issue. On the other hand, if you tend to trade every 3 years or so, as many people do, consider the fact your vehicle will be valued accordingly. For example, although you only drive it for 3 years and then trade, it will be valued as a 4-year old vehicle.
Things To Keep In Mind At Year End Time
It’s always a good idea to know what you can and can’t do without. Dealers will eventually run out of certain models and trim levels. Your desired color and preferred vehicle features may not be available. Keep your list of ‘must haves’ handy and consider where you’re willing to be flexible.
Check to see if the model you’re interested in has been redesigned for the next model year. Vehicles made the year before a redesign are less desirable to many buyers. If you don’t need to own the latest, greatest, newest version you might be able to score a better deal this way.
Model year end can be a great time for buyers to pick, choose and often combine offers as manufacturers and dealers pull out all the stops. Low or no interest financing, cash back, rebates, loyalty savings and other incentives – they’re all in the mix this time of year.
Buying a car before the end of the year can have additional tax benefits for individuals and businesses, depending on the type of vehicle purchased and how it’s used. Some plug-in hybrids and electric cars have available tax credits applicable the year the vehicle was bought. Assuming you’re an April tax filer, the closer to the end of the year you buy, the sooner you’ll see the tax benefits.
As always, we suggest you do your homework and plenty of research before you head to the dealership. Model year end can be a good time to buy and CarSoup.com has all the resources you need to check dealer inventories, get quotes, find rebates and incentives, interest rate offers and much more.