Automotive advertising accelerates to a turbo-like frenzy in late summer as dealerships need to make room for the new model year vehicles.

Big rebates and 0 percent financing offers can sure tempt shoppers to make a quick deal for a 2017 car. But this season is complicated because used car prices are unusually high due to hurricanes that wiped out an estimated 1 million vehicles and because there's an oversupply of new cars available. 

“Given that an optimistic auto industry has led to a slight oversupply of cars, some buyers might find not much of a difference in the price when they compare a 3-year-old, off-lease certified pre-owned vehicle and a discounted brand new vehicle,” says Mel Yu, Consumer Reports automotive analyst. 

The marked-down new cars are in the last days of their model year. The easy savings seem tempting, but the cars are technically already a year old when 2018 models hit the showroom. Rebates and added urgency can mean real savings off of the sticker price, but remember that every new car depreciates about 10 percent when it's driven off the lot. And a car purchased at the end of the model year could see its depreciation hit the average of 19 percent for a 1-year-old vehicle, CR's Yu notes. 

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. The most dramatic savings tend to be on models in their last year before a redesign. Most models tend to have highest reliability in their last production year, so it might be a good idea to buy, especially if it offers the latest safety features. However, the depreciation hit may be considerable once a flashy new model hits the streets.

Historically, the fall season tends to have the highest prices—when new cars are just arriving and the usual price hikes that come with new models have been applied to carry-over models.

But if past trends remain true, prices only climb a few hundred dollars between summer and winter. That means, on average, any savings from buying in the summer is negated by depreciation and only nominal price increases for the newer model. If you're looking to lease, be aware that some banks won't lease leftover cars after the model year changes.

When there are huge incentives, you may need to decide quickly, as the best inventory will rapidly disappear, leaving less-desirable colors, options, or trims. Incentive offers made during this season can show up mid-month, and fade away in just weeks.

Among the deals, you may find low-mileage “program cars” that were used as a demo vehicle or as executive cars. These typically have just a few hundred to a few thousand miles on them. Despite being slightly used and marked down, the warranty on such cars would begin when you buy it.

Generally, the model-year-end deals make sense only if you plan to hold on to a car for a long time or if you are a high-mileage driver (driving more than 15,000 miles a year) and looking to change vehicles every 3-5 years. For road warriors who rack up more than typical annual miles, a close-out car would give you one more year to spread those miles out, thereby preserving some trade-in value.

The exceptions may be those models for which there is excess local supply, enabling deep discounts on a solid model. That's what we're seeing right now with the Hyundai Sonata and Toyota Camry. Also, there is an upcoming opportunity with the Honda Accord, because the next generation of that popular car launches in early October.

Historically, Honda puts a huge rebate on top of old models within the first few weeks of the release of a new model. But you may need to act quickly, because those old cars are usually gone within days as big fleet companies, such as rental car companies, quickly grab what’s left on the dealer lot.

Driving a Bargain

Getting a great deal starts with shoppers identifying the best car for them, and then getting that car for a fair price.

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

Take it a step further, and our Build & Buy program can help you configure a car online and see quotes from more than 13,000 approved dealerships.

When shopping, don’t fixate on the advertised deals. And remember, there still may be more room to negotiate, as the dealerships are likely to be anxious to sell and the automaker may even have hidden spiffs to pad the dealership's bottom line, giving the sales managers a little more flexibility to deal. 

Review our car-buying tips before sitting down to negotiate.

Consumer Reports Build & Buy

In addition to car research, ratings, and ranking Consumer Reports offers subscribers access to the Build & Buy Car Buying Service at no additional cost. Through this service, a nationwide network of about 13,000 participating dealers provide upfront pricing information, as well as a certificate to receive guaranteed savings off MSRP (in most states). The pricing information and guaranteed savings includes eligible incentives. Consumer Reports subscribers have saved an average of $2,954 off MSRP with the Build & Buy Car Buying Service.