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Should you buy an all-new car or a proven carry-over car?

Consumer Reports News: September 01, 2010 02:09 PM

Fall brings the annual new-car model-year transition, and both television screens and dealership lots are now being filled with 2011 cars. Expect to be pummeled with ads focused on the latest performance, styling, and technology hype—all aimed at making your current ride seem boring, quaint, and destined for an imminent trade-in. But buying a brand-new model the minute it arrives from the factory may not be the best strategy.

Consumer Reports car-reliability data shows that most vehicles improve over the model run of their design, due to running changes to address bugs and owner niggles, and to improve general refinement. In other words, the first year for any new or redesigned model tends to bring the most problems. So, before rushing out to purchase such a model, be sure to consider a top-rated carry-over car—or wait for the second (or later) model year of a new design.
In a given year, only about 20 percent of the models are redesigned or significantly updated. That leaves the majority of vehicles being sold as carry-overs. Before you get seduced by automaker claims that their latest and greatest cars have made marked advances over older models, leap-frogging with more advanced powertrains and safety technologies, consider waiting until these fresh designs have been fully tested and have demonstrated a proven reliability record. After all, we have seen several new models lately not perform as well as their predecessors on both counts, and there are far more choices in carry-overs.

In looking through the models that carry over relatively unchanged this fall, we find quite a number of very good cars—ones that consistently meet Consumer Report's stringent criteria to be recommended. (To be recommended a car has to perform well in Consumer Reports testing; have average or better reliability; and, if crash tested, provide a good overall safety rating.)

These featured cars are all good choices, and as you can see, most have national year-end incentives to make them even more attractive. For this analysis, we have focused on 2010 models, though each vehicle carries over for 2011 with only nominal changes. Full 2011 pricing is not yet available for most featured vehicles.

As you study the chart, the potential savings below MSRP reflects any available customer rebates, hidden dealer incentives, and dealer holdbacks—essential information to help you negotiate the best deal. The vehicles are ordered within their category based on overall test score.

Model 2010 MSRP Customer rebate Dealer incentive Potential savings below MSRP
Small sedans
Nissan Sentra 2.0 FE+ S CVT $17,160 Yes No 15%+
Subaru Impreza 2.5i 17,495 No Southwest 5%+
Mazda3 i Sport 4-door Auto 17,105 No No 5%+
Family sedans
Nissan Altima 2.5 S CVT $21,840 Yes No 10%+
Subaru Legacy 3.6R Limited 27,995 No No 5%+
Honda Accord LX-P Auto 22,855 No Lease only 10%+
Ford Fusion I-4 SE 21,225 Yes No 10%+
Small SUVs
Subaru Forester 2.5X AT $21,495 No No 5%+
Honda CR-V EX 4WD 25,095 No No 5%+
Hyundai Santa Fe 2.4 GLS AWD 24,695 Yes Yes 10%+
Nissan Rogue SL AWD 23,300 Yes No 10%+
Mitsubishi Outlander XLS 4WD 26,390 Yes No 10%+
Midsized SUVs
Chevrolet Traverse 4WD 1LT $33,745 Yes No 10%+
Nissan Murano SL AWD 32,060 Yes No 10%+
Ford Flex SEL AWD 33,600 Yes No 15%+
Mazda CX-9 Grand Touring AWD 34,215 No Midwest 5%+

Buying a leftover 2010, rather than a 2011 model, should save you serious money upfront. As fall approaches, most dealers will be increasingly flexible to clear old inventory and you'll still get a full warranty. Of course, you might miss out on new safety features and other technology. And, in terms of depreciation, a leftover new car is considered a year old the moment it is driven off the lot. That means if you sell or trade it in after a few years, it will be valued similarly to other vehicles of that model year (not accounting for mileage) even though it's been on the road for fewer months. If it's being replaced by a knockout redesigned model, the resale hit could be even harder.

But if you tend to keep your car a long time or are a high-mileage driver, the near-term depreciation shouldn't be much of a factor. In fact, there can be special appeal for long-distance drivers as buying a 2010 at year's end will give you one more model year to spread your miles over, potentially changing your eventual trade-in from a lower-value, high-mileage car to one that is average. If you drive more than an average 12,000 miles a year, there could be impact on the trade-in value—unless you could apply those miles to one more year. (So, 15,000 miles a year on a 2010 bought at the end of the model year, would divide out to the 12,000-mile average after five model years, based on just four years of driving.)

To check out the best vehicles for your needs, compile a custom list of great carry-over models from our New Car Selector, or by viewing our Recommended models. In the Cars area of ConsumerReports.org, you can choose from eight Ratings and Buying Advice sections—each dedicated to a different car type, such as sedans, minivans, and SUVs. There, you can accelerate you search with specific recommendations and direct links to model overview pages for pricing, owner costs, and road tests.

Consumer Reports also has a " Build & Buy" service that lets you configure a new vehicle online via the model overview pages and then get guaranteed, competitive price quotes from up to three dealers in your area who have agreed to meet certain guidelines of conduct. Available to online subscribers, the service is completely free and you are under no obligation to buy.

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.

Jeff Bartlett  with Mike Dempsey

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