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Wednesday, June 19, 2024

How Purchasing Last Year’s SUV Model Can Save You Thousands

Shopping for a new car is an exciting time, and for many people, only the best and newest model of their desired vehicle is going to fit the bill. However, this choice toward the top of the line option can leave you spending a lot of money on things that don’t change from model to model. In fact, many of the newer models of SUVs have the same features as the models released the previous year. The primary difference between models? The price tag.

For the car shopper that wants to be financially thrifty but SUV savvy, consider buying last year’s model. The new models might look great on the commercials, but your wallet will love the difference in price between the 2020 SUVs on the lot and the unsold inventory from 2019 that the dealer is trying to clear out. Keeping your eye on the prize means looking at the clearance prices of brand new 2019 SUV.

The Features Behind the Price Tag

You will suffer from sticker shock when you compare the rates between the latest model in the showroom and the less noticeable current model or previous model hiding out among the cars on the lot. When you start moving through the features or gadgets that come with the latest model, you may be surprised to find out that everything is generally the same as last year’s model or the current year’s release.

Automakers follow a policy that AutoTrader has labeled the ‘model cycle.’ In the SUV sector, it takes about six years before a vehicle gets completely updated or receives a fresh new look. Even though the manufacture may be releasing a new model each year, it doesn’t have too many updates. The six-year cycle can be broken down into four categories.

  • Year one and two: In this time period, the vehicle experiences no changes and stays the same.
  • Year three: During this part of the cycle, the vehicle gets a subtle update that rebrands the design as modern and fresh. You could consider it a facelift. The updates may include a change in headlights, new paints colors, and potentially some new technology. As a whole, the adjustments are minor.
  • Year four and five: As seen in the first two years of market release, no changes are made to the SUV.
  • Year six: In this last year, an entire redesign takes place. The whole SUV changes, releasing an entirely new looking and riding vehicle. The chassis, interior, and engine are all updated and reconfigured, leading to the ultimate new SUV on the market.

When you evaluate this cycle, you can see that there are very few changes between vehicles in spite of the many models that are advertised and released. When you are comparing a 2020 SUV model to a slightly older 2019 model, you will see this cycle in effect. There aren’t many differences between the two if there are any at all.

The Difference in the Price Tag

If you have done any homework in preparation for your SUV shopping, you will know that new vehicles cost a pretty penny. From the looks of the commercials or your friend’s review, that SUV might be worth every penny. The real question is whether or not you can have that same experience for less money. If you choose to by last year’s model, there is no doubt about it. The 2020s haven’t received any big updates from their 2019 models, and the price is drastically different. Moving from 2018 to 2019 was a different story with model upgrades and changes, reflected in serious price cuts from a 2018 SUV over a 2019 model.

For example, buying a 2019 Jeep Renegade will cost, on average, over $27,000 while a new 2018 Jeep Renegade can be purchased for around $21,643. A 2018 model of the Hyundai Santa Fe would set you back about $31,000 but that seems reasonable when compared to the $38,800 price tag that comes with a 2019 model of the same vehicle. Adopting a purchase strategy that looks at previous model years first could save you at least $5,000 when buying an SUV.

The Dealership’s Interest in Selling

If you have been considered an SUV purchase, you’ve hit the lot at a good time. Dealers get antsy when there are too many older models sitting around the lot, especially when current year model shipments are due any day. In order to make space the 2020 models or the next big release, dealerships often attract new buyers with incentives and plunging prices on the old models still in inventory. These incentive plans are always changing, as consumers are aware of the discounts or benefits that were offered the year before. The best deals you will make are on the old models. You will even see differences between dealerships offering the sane SUVs, depending on how many vehicles they still need to sell.

The longer an SUV goes unsold, the more desperate the dealer is to find a buyer. You may see unheard of cashback offers, crazy low discounts off the MSRP, or lifetime warranty incentives. When you combine the discounts with an already lower-priced vehicle, you walk away with an extremely affordable SUV. If you can hold out on buying until the end of the year, there is always a serious final push to get rid of the remaining SUV leftovers from previous years.

The Consumer’s Responsibility for Buying

Armed with this information, you will be able to avoid falling for a commission-based tactic to buy the latest SUV displayed in the showroom. You already know that last year’s model will be every bit as good as this current one, but you can still get in over your head if you don’t know what a fair price is for a 2019 model. Compare prices and features between a 2018, 2019, and 2020 if you are going to make the best financial decision while still getting everything you want. Know what dealers are selling for, and use the power of negotiation and your understanding of the models to get the lowest rate on your SUV.