Year-End Car Buying Tips

Kevin McCormally: I’m Kevin McCormally of Kiplinger. I’m here with Mark Solheim
the Automotive Editor of Kiplinger’s Personal Finance magazine
to talk about buying last years car or next years car.

Mark seeing the model here means the new cars is on the show
room, the old cars are being pushed out with some great deals.
How does the buyer decide between buying the last of this year’s
model or the first in year?

Mark Solheim: Well first of all, you have to realize that the older model cost less
usually because it’s worthless. While it’s been sitting on dealer’s
load, it’s essentially bled resale value. It’s depreciated.

Kevin McCormally: How much or less is it?

Mark Solheim: Well it’s not unusual for a car to lose five percent of its value. You
have two new cars. One’s a new model year, one’s old model year
and that gap could be five percent which on a $30,000 car is
$1500.00.

Kevin McCormally: And so, how do I decide if that $1500.00 is worth it to me?

Mark Solheim: It depends on what kind of buyer you are. If you’re the kind of
buyer that thinks you're going to trade in the car in three years or in
five years, you might pay less now but got that much less or even
less than when you trade it in.

But on the other hand if you’re the kind of buyer that holds the car
until it’s expires and dies, it really doesn’t matter that much how
much it depreciates, you get the same warranty, same new car,
you’re the original owner.

Kevin McCormally: So anything that you could consider when you’re trying to decide
between the two models?

Mark Solheim: You do need to look at the difference in content between the older
and the newer model manufactures often, add new content.
Sometimes they won’t raise the price all that much but that is the
sticker price and they’ll add more standard features.

Kevin McCormally: Like what do they look for?

Mark Solheim: Some people will look for a bigger engine with more horse power,
with sometimes happens in a model year or a better sound and
stereo system. Personally on this particular for safety, if the
manufacturer is added standard safety equipment or another very
good feature electronic stability control then that would make the
sale.

Kevin McCormally: Thank you very much Mark.