Buying a new car is undoubtedly a significant investment, which is why finding ways to save money while doing so can make the experience much more rewarding. One often overlooked yet extremely strategic way to accomplish this is to purchase a vehicle at the model year-end.

As car dealerships prepare for the arrival of next year’s model, they tend to offer attractive incentives to get all of the old models out the door. This can present a unique opportunity for smart car shopping.

Learn why the model year-end is an excellent time to buy your new car, along with the potential discounts and additional savings strategies you can use to save money.

Why Model Year-End is a Great Time to Buy

As alluded to, the model year-end for vehicles is an excellent time to decide to purchase the vehicle. This period tends to last from late summer through early winter, depending on the vehicle’s production schedule, and is a fantastic window to score deals on new cars. There are a few primary reasons that this point of the year is an excellent time to buy, with the most prominent being:

1. Dealership Pressure to Move Inventory: As the new model-year vehicles begin to arrive, dealerships will be placed under a lot of pressure to clear out the prior year models to make room on the lot. The space and budget constraints of dealerships often cause the dealers to sell older inventory quickly, making them more willing to negotiate prices.
2. Eager Sales Quotas: For model year-ends that coincide with the end of the calendar year, dealerships may have annual targets they are trying to meet for sales. As the year winds down, salespeople will be highly motivated to boost their numbers, which can work in favor of car buyers who know how to leverage the situation and get aggressive discounts.
3. Improved Negotiation Leverage: Given the aforementioned urgency that dealers face, buyers often hold more negotiation power at the end of the model year, so chances are higher that the dealership will accommodate the terms you argue for.

To sum it up, model year-end creates a temporary buyer’s market that you can capitalize on if you know what you’re looking for. Take advantage of the fact that dealerships will be offering reduced prices and more open to hearing negotiated offers.

Potential Discounts and Price Reductions

Knowing that the model year-end will offer a savings opportunity is one thing, but determining whether that opportunity is worth it is another. There are a few ways in which you can see discounts or price reductions during this time of the year. First and foremost, as next year’s model of vehicles arrives, the older inventory will depreciate almost immediately. To counter this, dealerships will often slash prices on the outgoing model year vehicles, with the markdown ranging from a few thousand dollars to much larger sums for luxury-style vehicles.

Additionally, assuming you’re flexible about not having the latest and greatest in terms of technological interior features, you will see an initial lower starting MSRP. Some dealerships will even offer enhanced trade-in deals when buyers purchase a vehicle during the model year-end as well which could open the door to free accessories, service packages, and even manufacturer warranties.

Dealer Incentives and Rebates

Beyond the simple discounts described above, there are also dealer incentives and rebates that you may be able to take advantage of during this time. Cash rebates are the most commonly seen which provide direct savings to a buyer, with the rebates amounting to potentially several thousands of dollars which can make a significant dent in the car’s purchase price. However, offers tend to be model-specific so you should speak with the dealership regarding the exact car you are looking at purchasing.

Additionally, automakers frequently incentivize dealerships to sell off their remaining inventory which is a perk that is often passed to you as the consumer. This usually is a reduced price, such as holiday sales events or loyalty programs, which offer rewards to repeat customers. You might also find that there are bundled offers included with the older models, such as free maintenance for a period of time, free navigation systems, and other benefits that increase value without changing the sticker price.

Financing Deals and Low-Interest Options

The final way in which you may be able to save some money when buying a car at model year-end is in the form of financing deals. To boost year-end sales, manufacturers and financial institutions may offer financing deals such as 0% APR for a set term or even reduced interest rates on auto loans. This can significantly reduce the long-term cost of ownership for the vehicle, even if the sticker price on the car has not dropped much.

In addition to lower interest rates, some dealers may offer deferred payment programs that allow you to postpone your first couple of months worth of payments. This can offer you greater flexibility, particularly during the holiday season when your budget may be tight. Finally, though a lesser seen financing deal, dealerships might provide you with better deals if you have a high credit score which gives you more negotiation power.

Weighing the Pros and Cons of Year-End Purchases

Clearly, all of the above savings are the main benefits of purchasing a vehicle that is at its model year-end. With that said, there are some drawbacks to purchasing a vehicle at the end of the year, and it is important to keep in mind if this is a path you want to consider. The most notable drawbacks include:

1. Limited Inventory Available: As the model year-end, and calendar year-end, approach rapidly, fewer models will be readily available. With popular variations and configurations sold out, your choices may be limited, and you may have to settle for colors, features, or other options you don’t necessarily want.
2. Fewer Customization Options: Building off of the last drawback, the limited inventory means you may have to compromise on some features and will be unable to design the vehicle to your preferences.
3. Depreciation Factors In: While you are technically still getting a new car, it will immediately be considered a year old from a depreciation standpoint which can impact its resale value in the future if that’s a course of action you wish to take.

These aren’t necessarily dealbreakers when buying a new vehicle. However, it’s important to weigh the pros and cons if you have aesthetic preferences or intentions to resell the car at its trade-in value later.

How Endurance Auto Protection Can Offer Additional Savings

Far too often, people think that the MSRP is the total price of the vehicle they are purchasing. However, the total price of a vehicle is the MSRP, and any long-term costs go into keeping the vehicle functioning. This can include maintenance, repairs, and other similar items. Adding an extended warranty, also known as a vehicle service contract, such as one offered by Endurance Warranty, can reduce your long-term cost of ownership by covering the cost of repairs included under your warranty contract.

At Endurance, there are many automotive warranty options to choose from, each with customizable options, but the three flagship plans are the Superior, Supreme, and Secure Plus plans. The latter offers targeted protection for older vehicles, covering only the most vital components under the hood, whereas the former two offer more comprehensive coverage designed for newer vehicles. If you’re seeking near bumper-to-bumper protection for your new purchase, though, the Supreme plan offers the closest to new manufacturers’ warranty covering everything from big parts such as the engine down to small parts such as seals and gaskets.

On top of this financial coverage, all Endurance plans come with standard benefits, including 24/7 roadside assistance, rental car reimbursement, trip interruption coverage, and exclusive use of the Endurance Mobile app. However, contract holders can also activate a year of Elite Benefits for a small activation fee, which unlocks bonus perks such as up to four tire repairs annually, up to $500 in collision coverage, key fob replacement, and more.*

Protect Your New Purchase With Endurance Warranty

Buying a new car at model year-end presents you with a unique opportunity to save big between dealership markdowns, manufacturer rebates, and special financing deals. While there are some trade-offs if you have specific design preferences or resale intentions, the benefits often outweigh the drawbacks. If you’re prepared to act, then do your research and negotiate confidently at the dealership to secure a deal on your new dream car.

Take things a step further and consider adding an Endurance Warranty vehicle service contract to your new vehicle to stay protected against unforeseeable future costs. This will help safeguard your investment and enhance the value of your overall purchase.

Contact an Endurance plan advisor at (800) 253-8203 or request a FREE quote online. You can also simply shop our eStore to get a feel for plan recommendations and see your price now.