Buying a Previous Model Year

Good things come to those who wait: it's not only your favorite phrase, it's your way of life. That's why you've decided to buy a previous year's car model.

But depending on your future plans, this idea may not be as savvy as it seems. Before you head to the dealership to make your purchase, check out all the pros and cons of buying a previous year model to make sure this choice is right for you.

Pros of Buying a Previous Model Year

Price

When most people think of buying a previous model year vehicle, the first benefit that comes to mind is price. It's true that many dealers will sell previous model year cars at a discount in order to make room for the newer cars coming in.

Trade-Ins

If you are trading in your old car at the time of purchase, this mindset may prove doubly beneficial. Since you already have a strong position in the negotiating process, it may be easier to bargain for a higher trade-in price on your old car.

Incentives

Dealers also like to offer incentives and rebates on previous year models to help them move the cars faster.

Cons of Buying a Previous Model Year

Still, there are some potential drawbacks to this method of buying a car.

Resale Price

While the purchase price will be lower than that of a new car, so will the resale price. As soon as the new model year is released, the resale value of a previous year model will depreciate more quickly.

If you are intending on owning the car for many years, this will not be an issue. But if you're unsure about your future plans for the car, proceed with caution. Remember, cars' values depreciate fast, especially within the first few years. A previous year model will already be considered a year old at the time of purchase.

Limited Options or Out of Fashion

This method is also not recommended for the aesthetically sensitive. Waiting to buy a previous year model often leaves you with less color options, and the new year's model may look drastically different, automatically signaling your car out as an older version.

When to Buy a Previous Model Year

You've reviewed the pros and cons and decided that buying a previous year model is for you. But now, depending on the time of year, you may want to wait a bit longer before pulling the trigger. There are certain times of year when buying a previous year model car will offer even more savings.

• July through October.
  • In general, this is when most of the new model years are rolled out. Dealers will be looking to make room on their lots for the most recent merchandise.
• Labor Day weekend.
  • The end of the summer plus the need to offload older models combine as a great excuse for many dealers to hold big sale events.
• December.
  • The holidays and end of the calendar year offer more good reasons for a dealer to throw a big sale.