My sports-addled 7-year-old son spent last Sunday afternoon as he usually does -- in front of the television, watching a pair of NFL tilts. "Dad," he said, "there seem to be a lot more car ads than usual today. Why?"
I didn't let him know that I was glad about that -- ads during football games often include previews of violent TV shows and ads for erectile dysfunction medications. I explained to him that it's the end of the carmakers' model year, most dealers have new 2008 models on their lots, and they want to sell the leftover 2007s as soon as they can.
Hence the extensive "Clearance Sale" promotions during the games, with Toyota
Nearly all carmakers have year-end "sales events" in November and December, as a flip through your local newspaper -- or an afternoon watching football -- will show. And if you're in the market for a new vehicle, grabbing a leftover 2007 model at a sizeable discount might be a good plan. Is it?
The good and the bad
First, a disclaimer: As I've explained elsewhere, I'm a big fan of buying nice used cars instead of new ones. You get more for your money, take less of a depreciation hit, and the long-term reliability and durability difference between a new car and a lightly used one just isn't that big anymore.
That said, there are certainly advantages to buying your next ride new. You get the latest features, a simpler purchase process (usually), more and better financing opportunities, and that great factory new-car warranty, just to name a few.
And you can get most of those advantages, with a sizeable discount, by buying a leftover 2007 model. What's not to like?
Well, there are drawbacks to buying a leftover new car. Consider:
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A brand-new used car. Sure, you get a discount by buying a leftover model. But you also get last year's car -- a car that's already "a year old" in the eyes of some, and a car that will be a year-old used car the moment you drive it off the lot. If you're planning on keeping it for 10 years and driving it into the ground (a very sensible approach, by the way), that might not matter much to you.
But if you plan to trade it in after a few years, think about this: What's the price difference between a new 2007 and a lightly used one? Is that difference worth it to have a new -- instead of a nearly new -- car for a couple of years? -
A brand-new old car. Cars and trucks aren't redesigned every year. They're redone in usually four- to six-year cycles, sometimes longer. If last year's car and this year's car are within the same cycle, there probably won't be much of a difference between them. A 2007 Dodge Charger, for instance, looks very much like a 2008 model and has the same drivelines and safety features available -- the Charger is a fairly recent design and won't be "all-new" for two or three more years yet.
A 2008 Chevy Malibu, on the other hand, is very different, inside and out, from a 2007 model, having been completely redesigned. (And very successfully, too -- if you're shopping Accords and Camrys, make a point of test-driving a Malibu. It's shockingly good.) The 2007 Malibu was designed several years ago -- and while it was updated over the course of its lifecycle, it's not nearly as advanced and spiffy as an all-new 2008. On the other hand, the discounts on obsolete cars like these may be steeper, which might be worth your consideration.
Of course, as I said, neither of these points may matter to you. If you've decided you want a new car instead of a used one, buying a year-end clearance model might work out well for you -- especially if near-term trade-in value isn't part of your calculation. You'll get new-car financing, a new-car warranty, and a full dose of that intoxicating new-car smell.
But I hope you'll consider shopping around for a lightly used model, which will give much of the same joy as a new car for significantly less money. And last but not least, think carefully before leasing your next ride -- the pros of a leased car rarely outweigh the cons.
