The number of car ads accelerates to a frenzy in late summer because dealerships need to make room for the newest model year vehicles. Big rebates and low-interest financing offers can tempt shoppers to make a quick deal for a leftover 2018 car, but there are a few key points that shoppers should consider before buying one.

“The fall is always an exciting time in the automotive world, with brand-new models arriving at dealerships and outgoing cars on big discount,” says Mel Yu, automotive analyst at Consumer Reports. “But car shoppers should think long-term when making their purchase decisions.”

More on Car Buying

The easy savings on marked-down 2018 models may seem tempting, but the cars are technically already a year old once 2019 models hit the showroom. Those deals can mean dramatic savings off of the original sticker price, but remember: Every new car loses value significantly the moment it's driven off the lot.

“Vehicles depreciate more in their first year of use than in any other year of their service lives,” says Michael Calkins, manager of technical services at AAA. “Year-one depreciation ranges from a low of approximately 18 percent for SUVs and pickups to a high of 35 and 45 percent for large sedans and electric vehicles, respectively.”

Generally, the model-year-end deals make sense mostly for shoppers who plan to hold on to a car for a long time or who put a lot of miles on the car (driving it more than 15,000 miles a year). 

Reasons to Buy Now

  • Most models tend to have the highest reliability in their last production year, CR's survey results have shown. This adds some appeal to buying a leftover car, especially for consumers who expect to hold on to the vehicle for many years. 
  • Shoppers may find huge incentives but will need to decide quickly, because the best inventory will rapidly disappear, leaving behind less desirable colors, options, or trims. 
  • Among the deals, shoppers may find low-mileage “program cars” that were used as demo vehicles or as executive cars, meaning they've been used by dealership officials. These typically have from just a few hundred to a few thousand miles on them. The warranty on such cars begins when they are bought, despite being slightly used and marked down. This has the benefit of a new-car warranty on a model discounted as a lightly used car.
  • Road warriors who rack up more than typical annual miles would benefit from a closeout car because it provides one more year to spread out those miles, which allows them to preserve some trade-in value. If you don't want to drive the same car for so long or don't drive as much, this may not be the time to buy.

Reasons to Wait

  • Shoppers have plenty of factors to consider when deciding whether to buy now or wait. For instance, an outgoing model will show its age as the freshly styled new model hits the streets. Sometimes the depreciation hit can be greater on the outgoing model because it instantly looks old in contrast to a flashy, redesigned 2019 model.
  • Historically, the fall season tends to have the highest prices, because new cars are just arriving and they tend to be a little more expensive than the outgoing version. Deals on 2019 models will become more prevalent through the months ahead.
  • Looking for a lease? Shoppers should be aware that some banks won't lease leftover cars after the model year has changed.

Remember the Big Picture

“Buyers also need to keep in mind that purchase price/depreciation is only one aspect of their overall driving costs,” says Calkins. “For example, while pickup trucks hold their value better [than] almost all other vehicles, they are also more expensive to operate on a per-mile basis. Buying more vehicle than you need in an effort to maximize retained value at trade-in time can cost more over the life of the vehicle than one that is ‘right-sized’ for their needs.”

Cars are not an investment. They are a depreciating asset. It pays to have a realistic, long-term view when purchasing a car, factoring more than the initial cost.  

Driving a Bargain

Getting a great deal starts with shoppers identifying the best car for their needs, then getting that car for a good price.

The Consumer Reports car model pages contain a wealth of information to empower shoppers to make a smart choice. We provide detailed pricing information that factors in all of the customer rebates and hidden direct-to-dealer incentives.

Our car-price analysts have studied the latest offers and found significant discounts on many CR recommended models—those that meet our high standard for test performance, safety, and reliability. True to historic trends, the most dramatic savings tend to be on models in their last year before a redesign, such as the BMW X5, Nissan Altima, and Toyota RAV4.

We recommend creating a list of models to consider, focusing on good, safe, reliable cars that suit your needs and budget. (Start with our Best New Car Deals.) Take test drives and compare notes on all of those vehicles. Ultimately, let the deals be the tie-breaker rather than the primary motivating factor.

Remember, there may be extra room to negotiate on top of advertised prices at the end of the summer, when dealerships are eager to sell their leftovers. There may even be hidden incentives from the automaker that will pad the dealership's bottom line, giving sales managers a little more pricing flexibility.

CR Build & Buy Car Buying Service

When buying a car, in addition to research and reviews, Consumer Reports offers its members access to the Build & Buy Car Buying Service at no additional cost. Through this service, a nationwide network of about 12,000 participating dealers provide up-front pricing information and a certificate to receive guaranteed savings off the MSRP to customers in most states.

The pricing information and guaranteed savings include eligible incentives. Consumer Reports members have saved an average of $3,101 off the MSRP with the Build & Buy Car Buying Service.