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Should You Buy a New Car From This Year or Last?

Do you want the latest tech or a better price?

Are you an early adopter who wants the newest style and tech as soon as it debuts? Or are you a bargain shopper who waits for things to get sorted then takes advantage of the reduced prices on outgoing models? This is a common scenario that car shoppers face every year as new models hit the showroom floor. Many vehicles have been redesigned and are packed with the latest technology. However, the prior-year models are still on dealer lots and are likely to be discounted steeply by automakers and dealerships.

Why are these vehicles so attractively priced? Simple. Automakers want their customers to buy the newest models and dealerships need to clear the way for them, as the older models take up space on their lots. It's similar to shopping for a new TV — they'll be expensive when the model is first launched, but as the year goes on and the new versions are ready to debut, stores need to clear out their inventory — by dropping prices — to make room for the latest models.

This scenario poses a compelling question for car shoppers: Should you buy the discounted outgoing car model or go for the latest tech in the redesigned model? Edmunds provides the pros and cons of each approach.

Redesign: Pros

Latest body style: You get to be a trendsetter and enjoy the satisfaction of being among the first to drive the newest generation of the vehicle. It will have a modern body style and will likely garner the most attention from bystanders and other motorists.

Newest technology: Often the automaker addressed what people didn't like in the previous car and fixed it in the redesign. These changes can come in the form of a more powerful engine, better fuel economy, a nicer interior, or all of the above. You will also benefit from the latest advancements in safety technology.

More variety: Every color, trim and option should be available to you in the current model year. If you don't see what you want or are very specific about your configuration, you can always place a special order from the factory.

Redesign: Cons

More expensive: The newer version of a model will usually be more expensive, both in terms of the starting price and meager discounts. There's often no reason for the dealership to discount the vehicle initially, and in some cases, a high-demand model will be listed for above MSRP.

Possibly less reliable: The first model year of a redesign is often the least reliable, according to a 2019 Consumer Reports survey. The technology is new and often hasn't had the chance to be tested extensively in the real world.

Changes may be too radical for you: Sometimes a redesign drastically shakes things up, and some buyers aren't willing to go along with it. For example, when Ford switched the Ford F-150 to an aluminum body, collision repairs became more expensive because the material was harder to work with. Sometimes, the redesigned styling is a dramatic departure from the previous model, which not everyone is a fan of. The second-generation BMW 4 Series comes to mind. It arrived with a polarizing and prominent front grille compared to the one on the first-generation model.

Outgoing model: Pros

Better discounts: The outgoing or discontinued model will be less expensive. But discounts will vary by vehicle, so it is important to know the market. Keep an eye out for manufacturer incentives, which are used to spur sales and can help bring the price down even further.

Greater reliability: The same Consumer Reports survey concluded that the final model year of a generation is often the most reliable. This is because many of the vehicle's issues have been sorted out throughout the model's run.

Best version of that generation: Besides being more reliable, the last model year of a generation typically benefits from all of the minor improvements the automaker made in previous years. The styling has likely been slightly tweaked from when it debuted, more power might have been added, and some previously optional features have likely been made standard equipment.

Outgoing model: Cons

Limited selection: Since these models are essentially on clearance, you're limited to the inventory on hand. So you may not have as much selection in terms of colors, trim levels and packages. Some brands manage their inventory better than others, so the selection will vary by vehicle and how late into the season you're buying.

Quicker depreciation: The model year before a redesign tends to depreciate at a quicker rate than the model that replaces it. It's about 6%-8% on average, according to Edmunds. Why? Supply and demand. In the used car market, the current body style will be the hotter and more desirable model. But you can avoid this issue by either leasing or keeping your car longer. Eventually, the depreciation will plateau and be on par with the depreciation of comparable vehicles.

Edmunds says

Making a decision comes down to knowing your needs and wants. Do you want the latest technology and styling or a proven vehicle with a better discount? We recommend test-driving and getting prices on both models to better determine what stands out to you the most.

See Edmunds pricing data

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