When it comes to buying fish, stocks, bonds or cars, timing is everything. The factors determining a savvy buyer’s ideal window of opportunity are mercurial. And, like the mystery surrounding a good fishing hole, there are plenty of industry professionals whose livelihood depends on shrouding the “inside line” in secrecy. For example, you won't find prices for “leftover” ’07 Chevrolet Malibus on Edmunds or kbb. Of course, when it comes to car buying advice, The Truth About Cars is on YOUR side. We’re here to help.
If you want to save money, it often pays to wait until a manufacturer introduces a new version of an existing model. Dealers hawk model year “close outs” on a regular basis. But the deals don’t get crack-a-lackin’ until the model undergoes a significant “refresh.” If the “old” model looks old or the “new” model is significantly better— like, say, the aforementioned Malibu— the discounts are intense.We've found new old ‘Bu's for $5k off list.
Normally, model “refreshes” are evolutionary, not revolutionary. And the price difference ‘twixt old and new is impressive, not astounding. But impressive ain’t bad. Let’s have a look…
The Nissan Murano has been a solid seller since its introduction in 2003 (with a 2004 model year designation.) This first major update has now shipped, as a 2009. As there was no 2008 model, disconcerted dealers now have 2009 AND 2007 Muranos on sitting on their lots side-by-side.
What’s the diff? The new model gets a more hideous nose and badly revised sheetmetal. Horsepower’s up 25, though mileage remains roughly the same. Nissan claims the new Murano has increased rigidity and decreased noise. In the main, that’s it.
There is a value to newness. It is nice being the first on your block with a car no one’s seen before, to feel special for a while, like you’re on the cutting edge. But there’s also value to be extracted from Nissan dealers with unlucky ‘07s who MUST lure customers away from the new and improved Murano. We're talking $1,500 from Nissan and the $2,500 between the dealer’s sticker and his or her invoice. Or more.
After six years, Volvo is also launching a heavily-revised V70 wagon. The new model takes their bread-and-butter load lugger up a whole platform, from P2 (shared with the S60) to P24 (shared with the S80). Bottom line: it’s a move up market, not up-size. In America, the engine gains a cylinder, the horsepower jumps from 168 to 235, (the 2007 turbo makes 218) and gas mileage drops by around five mpg. The new V-wagon extends a lineage of safety innovations and offers some unique new features, like a power tailgate.
Volvo's a done a good job reducing supplies of the outgoing model. But more than a few 2007s V70s lurk on the lots. In the notoriously cool buying climate of January and February, buyers could find discounts as deep as upstate New York snow. There’s around $2k between invoice and sticker, more with more depending on options and local incentives.
In 2003, the Pontiac Vibe began rolling out of the NUMMI plant (a joint venture between General Motors and Toyota) and the Toyota Matrix emerged from Toyota's Cambridge, Ontario plant. Both vehicles are tall, harshly-styled Corollas– and I mean that in the nicest possible way. Both the Vibe and the Matrix are reliable, versatile, borderline fun vehicles. They just look… dated.
The models’ sheetmetal changes a bit, but the song remains the same; there’s no drastic increase in size. Horsepower is up, without a hit to gas mileage. For the base 1.8-liter engine, GM and Toyota lose the manual transmission option. Toyota and Pontiac are also offering a 2.4-liter powerplant putting out 158 hp. All wheel-drive is back as on option. If these things be important to you, stay home until March.
Good news for the bargain shopper: the 2009 versions of Matrix-Vibe don’t look all that much better. Go poke around under the plastic pennants and you'll find aggressively-priced models aplenty. Dealers are watching flat spots grow on these all season radials, knowing the new 2009's are being assembled in California and Canada as I type.
Here’s the caveat: resale. When a new model comes out, it dings the value of the previous model. In the grand scheme of things, over the long term, it’s not a huge hit. In the short term, it’s a big old whack. If you’re planning to sell your pre-model change car in two to three years, you will not get as much money as if you’d bought the “new” new car.
If you sell your pre-model change vehicle in five to seven years (or longer), factors like mileage and condition come to the fore. Of course, even then, timing is everything.
Tell me about it. I’m trying to purchase an ’07 Uplander on the grounds that last year’s model of an uncompetitive minivan should be practically given away. I intend to hold onto a minivan for at least 5 to seven years. Just getting a dealer in the northeast to play ball is surprisingly tough, though.
This is the exact advice I’ve given my own dad. Back in 1992, he was able to buy one of the remaining Lincoln Mark VII’s for only 22k. He drove it for 8 years and a bit over 160,000 miles before some errant driver sideswiped it and totaled it. For a guy who only wanted American-style luxury, insulation from NYC traffic, and… well… a Lincoln, it was a perfect fit.
He followed that up by buying the Lexus ES300 in it’s last year of production. He’s still driving it today and absolutely loves it. He made a semi-pessimistic bet by having the vehicle leased at first (the #$%$^%^$ accountant told him to do that, I told him not too). Well, the lease was at least very small and I wouldn’t be surprised if he still has that car by 2012.
As for more late model vehicles, I recently saw a 2005 Pontiac Torrent go through a sale for $5000. It had 88,000 miles, a non-descript Pewter exterior, and the interior definitely needed a detail. However, it was an All-Wheel-Drive model and had a lot of the options that most minivan owners want for their next vehicle. A friend of mine bought it, and I’ve been envying his wise choice ever since.
Last year I bought a 2004 Dodge Intrepid with leather, chrome wheels, virtually all the option sans the sunroof… for $3000. It had been fleet maintained and really looked like a brand new vehicle inside and out. Nobody looked at it due to the assumption that it had a head gasket blowing 2.7L V6. Turned out it had the rare 3.5L engine with 230+ HP. Who knew? I did ;)
“The models’ sheetmetal changes a bit, but the song remains the same; there’s no drastic increase in size. Horsepower is up, without a hit to gas mileage. For the base 1.8-liter engine, GM and Toyota lose the manual transmission option. Toyota and Pontiac are also offering a 2.4-liter powerplant putting out 158 hp. All wheel-drive is back as on option. If these things be important to you, stay home until March. ”
Thanks for the info. The car is appealing to me (in either Pontiac or Toyota livery) only if it has AWD. In a few years, when I’ve saved enough to pay cash, I’ll put it back on my shopping list. I’ll buy a 2011 model after the 2012s come out.
I tried to buy a Pontiac Aztec in 2002 based on that logic–no one wants it, so the dealer should play ball. However, no luck. The sales guy could have cared less about the (lack of) demand for the vehicle, I still had to play those stupid negotiation games…so I walked.
Sure, these cars are discounted, but who trusts the dealer/salesman to actually let you walk out of the shop with such a good deal?
All too often the discount is not enough to take the depreciation. Also, dealers are sometimes illogical from our point of view.
I only recommend this strategy for folks who DEFINITELY keep their cars more than five years and/or when you can find last year’s model being discounted a great deal more than the present year model.
It’s not that simple for the Matrix/Vibe as the price of the new models is projected to go down, plus a s**tload of previously unavailable or expensive safety equipment (side airbags, ABS, ESP) will be standard.
I got a 2005 Accord with 12,000 miles for a very low price. Not that the 2008 isn’t great, but it was just a bit too big for me and I hated the new gauges.
Why buy from a dealer at all? If buying used, try ebay or AutoTrader and buy from a private seller with maintenance records.
That is one of the reasons I purchased a new Dodge Ram 1500 three months ago for $16K, which was $10,500.00 discount from the $26,500.00 the dealer wanted for the truck. ($6K rebate included). I recognize Chrysler may be toast in a couple of years, but I will drive it at that price until the wheels fall off.
Personally I avoid buying a first year model redesign car. I like to let them have a year or two to make sure it’s screwed together correctly and to work any bugs out.
Beware of ethically-challenged dealers selling so-called demonstrators, then adding Freight and PDI to the transaction. A demonstrator is a used car. The dealer should fully absorb these costs.
But there’s also value to be extracted from Nissan dealers with unlucky ‘07s who MUST lure customers away from the new and improved Murano. We’re talking $1,500 from Nissan and the $2,500 between the dealer’s sticker and his or her invoice. Or more.
But didn’t they LOWER the price of the 2009 Murano by at least $1500? So the rebate basically gets the 2007’s to new 2009 prices? Yeah, that 2007 is a steal (not)
For decades my Dad has purchased his cars by a similar process. When a new car comes out, invariably the local dealers will try and hustle him to buy it during one of his service visits. He kindly and politely tells the sales staff after taking the new model for a test drive, ‘Gents, this is a nice car and I like it a lot; now when this model comes to the end of it’s production run and a new one is coming out, call me and I’ll consider it’. A few years later when the next model arrives, he’ll bring in his trade, he pays the difference in cash for the ‘old’ model and usually gets a good deal, sometimes a very good deal and by in large he has had very good luck with reliability through the years using this car-buying method, so yes, All Hail Brand New Old Cars!!
I bought a 2008 Vibe a week ago today. The dealer had 7 to choose from that have been sitting on his lot for well over a month. I like the styling of the 2009 model better and the lower price too, but the deal was too sweet to resist. If GM goes under parts should be available at Toyota. The list price was $20410. With my GM card earnings I paid $14872. It was a cold day when I drove it home. I though it rode like a wagon compared to my 97 Escort wagon which is my favorite car. Bought that in 2003 for $1300 with 100K on it. It is still worth about that 5 years later with 139K on it. What a deal!
Over the last few years I’ve bought several cars that were leftovers, demos or just plain used. I’ve gotten great service from both dealers and independents and I’ve been able to drive a couple of cars – including a Ferrari – that would have been laughably beyond my means when new. On the other hand, I didn’t gain anything by buying a Chrysler 300 new, since it didn’t start to break down until the warranty expired.
I’ve thought about this situation, and see a dilemna.
What about the factor on at the other end: when it comes time to sell the car. [we will assume you’re keeping it for 5 years].
To continue the example in the article, getting a 2007 Murano today means that in five years — 2013 — you’re selling a 6-year old vehicle. Conversly, getting a 2009 Murano now means you’ll be selling a 4-year- old vehicle. There’s at least a couple grand there, no?
Kman,
You hit the nail on the head. That is why you have to make sure you are getting a great deal, not just a small discount like 1500 or 2000 dollars. I suggest that at best, an older model car is worth blue book on a used one with low miles. Otherwise, you might as well look at the new model, or an older one with more depreciation already off the price. There are often individual circumstances, but overall, I say get a steal, or pass.
Both of my cars have been “Brand New Old Cars.” I still have a 1997 Honda Passport that my dad bought for me in May 1997 – right before the redesign. The sticker for the EX model was $27,000, and my dad got it for $21,000. Although I now need a fuel pump, the truck has currently has 211,000 miles.
My “newer” car is a 2002 Honda Accord V6 coupe that I bought for myself in December 2001. The redesigned model had been circulated on the web, so this Honda dealer was willing to negotiate heavily on the car. I saw it roll off the truck, and I bought it with 3.1 miles on the odometer for $21,250 – sticker was $26,645. This car has 128,000 miles, and after the big 105,000 mile service, only needs motor mounts.
As evidenced, I keep cars FOREVER, and I don’t care about driving the newest of the new models. This strategy has really helped me save some money.
Matthew Danda :
January 21st, 2008 at 12:24 pm
I tried to buy a Pontiac Aztec in 2002 based on that logic–no one wants it, so the dealer should play ball. However, no luck. The sales guy could have cared less about the (lack of) demand for the vehicle, I still had to play those stupid negotiation games…so I walked.
Sure, these cars are discounted, but who trusts the dealer/salesman to actually let you walk out of the shop with such a good deal?
You tried to buy an Aztec? Wow. :-)
>>>Both the Vibe and the Matrix are reliable, versatile, borderline fun vehicles. They just look… dated.
They looked bad when they came out, and the more you look at them, the worse they look.
Lumbergh21:
You tried to buy an Aztek?
Its like saying someone tried to committ suicide.
I purchased a new ’07 Accord 4dr EX-L 6MT with Navi in October…just as the Honda dealers wre filling up with ’08’s. Let’s face it, not many people want an Accord 4 door with a stick…my gain I guess! Sticker was 29,990 but I paid 25k…the ’08’s are bigger, slower and use more fuel. Only item I miss is the Bluetooth integrated into the Navi…but it is not woth a 5 grand penalty. Plus no 4 door 6 speeds.
First year of model runs tend to have problems though..my wife’s ’04 Toyota Sienna AWD had a full page of problems in 2 years before we sold it..
No mention of the Honda Pilot 2008 vs. 2009. I recently read there is an overstocked inventory (on TTAC) of Pilots so deals should be around. And with the 2009 redesign coming the 2008 should be even less expensive. Any comments?
Also, any experience with Carsdirect.com or CostCo buying? I HATE dealing with salespersons.