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Car buying: Is a leftover model a good deal?

Consumer Reports News: August 11, 2010 03:40 PM

Fall has been the traditional time for new car introductions since the mid-1930s, when the practice was begun as a way to promote year-round sales and employment in what had previously been a seasonal industry. Prior to the change, most new cars came out at the start of the calendar year, followed by a round of auto shows. By later in the year, sales had all but dried up. Today, manufacturers introduce new models throughout the year, but autumn remains the official start of the new automotive year. But an age-old question remains: If you’re in the market for a new car, are you better off to wait for new models to come out, or to buy a leftover at the end of the season? The answer is, it depends. Car makers completely redesign models every five years or so, and they normally make updates to mechanicals and styling midway to a full redesign. Waiting for updated or redesigned models means you’ll get the latest safety and convenience features, and updates to engines, transmissions, and technology will likely improve fuel mileage and even performance. On the downside, new models almost always cost more than the ones they replace, and discounts are less likely. Even models that are only slightly revised between redesigns routinely get price hikes every year.

Buying a leftover should save you some money upfront, because dealers are likely to deal to clear old inventory. You’ll still get the full warranty. If you are a long-distance driver, buying a 2010 at year’s end will give you one more model year to spread your miles over, potentially changing your trade-in from a lower-value, high-mileage car to one that is average. Of course, there are some trade offs.

A leftover new car is a year old the moment you drive it off the lot. That doesn’t matter much if you keep your cars a long time, but you’ll lose a bundle on depreciation if you trade every couple of years. And your leftover car is likely to depreciate even faster if it’s been replaced with a redesigned model for the new model year. You also may miss out on new safety features and other equipment.

One final thing to consider is reliability. Our reliability surveys have shown that new models have more problems on average than those that have been on sale for a year or more. The last year of a model’s production is often the most reliable.

With car buying, there are many factors to consider. This time of year, there are even more with the choice from two model years. Remember to do your homework and look long-term in making your decision.

Jim Travers

For more information on upcoming new vehicles, see our New car preview section. Also check out our new car buying guide for advice on choosing, buying, and financing a new car.

   

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