Should You Buy a Last Year’s Model New Car?

Should You Buy a Last Year’s Model New Car?

Awhile back I saw a blog post telling readers they could save big money on a new car if they buy a last year’s model new car. What they were referring to is the latter portion of the calendar year when dealers get the next year’s new cars and are trying to off-load last year’s new cars.

Is There Really a Difference in Price?

The first reason against buying last year’s model in order to get a new car is simply because there really isn’t that big of a difference in price. Let’s take a look at an example to illustrate this point. I just looked up the Kelley Blue Book value of a new Chevrolet Silverado 1500 LT Crew Cab, one a 2017 and the other a 2018. The difference? At most a whopping $1,266.

What About Discounts?

At this point you’re probably thinking I’ve forgotten about all those thousands in cash back and off MSRP that dealers advertise for model year-end closeout events. What about that 72 months 0% APR!? Don’t get your hopes up. My first suggestion would be to read the fine print.

You’ll Still Have the New Car Hit

If those reasons aren’t enough, my final reason for avoiding a last year’s model new car is due to the new car hit. Yes, even though it’s last year’s model, it’s still a new car and will be impacted by the new car hit.

What You Should Do Instead?

So, should you buy last year’s model new car?  NO! It’s still new, so it’s still going to cost a lot and depreciate at the same rate (actually faster because it’s already a year old), with most of that coming in the first several years.

Moral of the Story

If you really want to save big on a vehicle purchase, look for a nice used car in the 3-5 year range, or even older. After all, buying a nice used car is really the only way to get a good deal on an item that depreciates so much over its lifetime.

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