10 End of Model Year Car Buying Tips

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The car business is run by the calendar, and one of the big events on the agenda each year is the change of model year. A new model year means new pricing, new options, maybe the end of one nameplate and the beginning of its replacement. As a buyer, the end of the model year signals one thing: Opportunity. If you’re ready to buy a new vehicle, the end of the model year may be the very best time to act. You’ll have a choice between a wider range of vehicles, and you’ll be in a buyer’s market at many dealerships, as new inventory commitments have been made, and space on the lot is at a premium. Here are 10 tips for buying a car at the end of its model year.

Watch the Calendar

The End of the Model Year can be a fluid time, different from brand to brand. Generally speaking, new models start rolling in the late fall to late winter, and last year’s model becomes a leftover about the same time. Dealers begin advertising clearance sales, and manufacturers supply incentive payments and rebates, some of which are directed to buyers and some of which are aimed at the dealers behind the scenes. If you can hold out until this window of time, you may have some of the best opportunities to get the lowest purchase prices and most advantageous terms. Check manufacturers’ websites, television advertising and even newspaper ads (remember those?) for hints about which cars are lingering on lots, and what’s new.

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Be Ready to Buy

Do your research before you head out to the lots. Figure out what cars are on your list, how much they cost, and whether or not they’re due to stay in production for the new model year. If they are going to stay, find out how they're going to change. Find time to test drive, compare candidates and narrow down the field. Examine your budget, get your financing pre-approved if you need a car loan, and discuss your potential purchase with your insurance agent to avoid surprises. Identify your closest dealerships, and make sure that they are well-reviewed on Yelp and other crowd-sourcing sites. Talk to your accountant to decide if there are any tax advantages to leasing versus buying. Do your homework.

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Consider the Length of Ownership

At the end of the model year, there’s a balance to be struck. Often, a car model will carry over from one year to the next. It is likely that you could buy a new 2016 model year vehicle for $1,000 less than the identical 2017 model year vehicle. If you buy and keep your car for many years, this could be a smart buy. If, however, you like to swap out your cars on a regular basis, be aware that your 2016 car will immediately be worth several thousand dollars less than the identical 2017 car placed into service on the same date. This could cost you if you sell or trade your car within three or four years.

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Look for Discontinued Models

If you’ve heard rumors that a car you are considering is about to end its production run, the end of the model year is the time to strike. There are many reasons why a manufacturer might choose to discontinue a model, but the most likely reason is disappointing sales. Some cult favorite cars have gone away in the past few years: Toyota FJ Cruiser; Dodge Magnum; and Honda Element come to mind. If you’ve been on the fence about a cool car and you hear that it has been discontinued, the time to move is now, before inventory levels are depleted and scarcity forces prices to rise. If you wait too long, you’ll have to buy a used version.

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Explore Inventory Online

Most dealerships include a database of current inventory on their websites. Use this at the end of the model year to uncover a glut of leftover cars from the previous model year, and you’ll put yourself in a position to make a good deal. The longer a car sits on a dealer’s lot, the more eager they are to move it along to a buyer. Lot space is finite, and dealers pay financing charges to the manufacturers or to their own banks while the cars are in inventory. Help a dealer move older inventory, and they’ll be inclined to help you out with a price break. Decode the online inventory puzzle, and you can keep some money in your pocket.

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Never Pay More Than Sticker Price

Because of how franchise laws are written, auto manufacturers don’t set the selling price for their products. They set Manufacturer’s Suggested Retail Prices (MSRP), and the individual dealerships are free to sell cars at whatever price the market will bear. Dealers are required to display a sticker in the window of each new vehicle, called a “Monroney Sticker” after Senator Mike Monroney, who sponsored the Automobile Information Disclosure Act of 1958 mandating the sticker display. Dealers will often add accessories and other charges that mark up the price. Don’t fall for this tactic. No matter how hot or rare a new car is at the end of the model year, its value is tied to MSRP when it comes to insurance, resale and depreciation.

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Be Flexible About Colors and Options

If the new models have started appearing on your dealer’s lot, that means that the end of the model year has arrive has reached the end of production. You may be forced to choose a car that’s not your first choice of color, and it may not have the exact combination of features that you’ve imagined. It may be possible to get additional equipment added to the vehicle, or to get some accessories removed before you buy, and you can try to get the dealer to pay for the labor of installation or removal. Most cars are offered in a limited range of colors these days, so unless you’re very particular, you can learn to live with your second or third choice (if it saves you money).

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Beware of the Bait and Switch

Unscrupulous car dealers have been known to use a tactic known as “Bait and Switch.” They advertise a vehicle, usually a leftover from the previous model year, at a substantial discount. When you arrive at the dealership, that vehicle has miraculously been sold – but there’s a very similar end of the model year vehicle on the lot that you can buy at a higher price. This tactic is technically illegal in many states, but it is very difficult to prove and rarely prosecuted. If you encounter a “Bait and Switch” situation, walk away from the dealership unless you are prepared for a very contentious, protracted negotiation that includes threats and recriminations, and will undoubtedly sour your car buying experience. It’s probably not worth it.

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Shop on a Rainy Day

An empty showroom is prime territory for deal making at the end of the model year. Avoid weekend days if you can, and avoid the last day of the month when dealerships do their best to create the illusion of high demand by boosting advertising and promotions. Get all of your ducks in a row, take a half-day off of work, and go to the dealership on a rainy Wednesday afternoon to make your deal. You’ll find a dedicated sales person who isn’t looking over your shoulder for an easier mark, and you’ll experience fewer distractions during your negotiating process. Make an appointment in advance, show up on time, and let your sales professional know that you are a serious buyer who has done the research and is prepared to buy at the right price.

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Always Be Ready to Walk Away

Until you sign on the dotted line and drive that new car off the lot, be prepared to walk away from negotiations at the end of the model year. You always have options. You can continue to drive your old car. You can go to another dealership. You can rent a car until you find the right car at the right price. You don’t have to submit to a dealer’s terms unless you are completely comfortable with the deal. Keep your options open – don’t let a dealer hold your car keys or driver’s license hostage (a sleazy tactic that some dealers still use). You are in charge of your own finances, and no one can force you to buy a car if you are not ready.

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