What is the percentage of depreciation of a new leftover (2019) as opposed to a new 2020 model?
That will not be known for some time and will depend on the vehicle and the demand for it in future years. So buy what you want and drive it for a long time .
Tricky to calculate. One reason is Ford heavily discounts new vehicles, so it is tricky to compare. Surprisingly, some dealers are not in a hurry to move certain vehicles. One reason is that they may receive Mfg support on them. The biggest difference is in cases where the new model is “all new” meaning of a different generation. That is the case with the Escape. The 2020 is an entirely new model. I think if you are bargain hunting, you may have to wait a bit though. The 2020 just came out. I’ve never even seen one in person and Ford has not even done its pre-sale media tour.
If you buy a new 2019 it will already have depreciated in value. The 2020 being the brand new model will suffer less depreciation and be the current model longer.
Pretend its January 2020 and the dealer wants to move an unsold 2019 that has been on his lot since 2018 when the 2019’s came out. In another month or two the 2021 models will be out. So come march your 2019 is suddenly two model years old and the last year of the previous gen. Its depreciation curve like it or not will be steeper than the 2020 but if you can negotiate hard and keep the vehicle a number of years, you can actually win by getting a new car at a selling price substantially below what you would pay for the new model year one.
This is incorrect. If you buy a new 2019 now, you will still pay MSRP less any applicable discounts and rebates. You will either write a check for that amount, or take out a loan for that amount plus interest. However, the moment the dealer applies for title in your name and you drive it home, now it’s a used car, which is treated as a year old for valuation purposes (albeit with very low miles). Therefore, it will depreciate far more than a new 2020 model would, at least during the first two years of ownership.
If you are planning to buy a 2019 model, the smart thing to do would be to wait until January or February, when the manufacturer will offer huge incentives to clear the 2019 models. Remember that if you pay less upfront, the losses due to depreciation will be smaller.
We bought a 2010 at year end , had a very good discount and we still have it here in 2019 . Depreciation at time of purchase was not even a factor . If the vehicle is what you want , price is acceptable and unless you are going to sell or trade in 3 years just do it.
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How is that incorrect, its a summation of what you yourself concluded? The exception would be if he could get it with a bigger discount than the value hit of the first year depreciation.
The other factor - the 2020 is a new model, so dealers will not negotiate much on price, so you’ll pay even more than if the 2020 was a continuation of the prior model. Also, first year cars can be more troublesome, Ford’s having lots of problems with the new Explorer.
Look at the requirements needed to lease any vehicle.
The money required up front is the depreciation of the vehicle when it’s driven off the lot.
Tester
Depreciation has to do with the value of something, which is independent of what price you pay for something. So unless you have some exact figures of what you will pay for a car vs. what the market value is, it’s hard to tell which is better for you.
Maybe I’m missing something, but the way I see it depreciation is only an issue if I’m planning on selling it in the next couple of years. Other than that, I don’t care what the value of something is a month after I buy it.
If I bring home a new laptop and take it out of the box, it’s worth less than a “new” one. If I buy a couch and sit on it one night it’s used and worth less.
Just buy the car you want and can afford.
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The dealer is the seller and is taking the initial hit on depreciation off their lot on a one or two year old model year. No one is going to pay 2018 msrp on a leftover 2018 in 2020.
The other advantage for those of us lucky enough to pay personal property tax is that a brand new 2018 first registered in 2020 will have two years depreciation for tax purposes. Around here, you’d probably be 1/2 the yearly tax compared to current model year. It drops precipitously in the first few years…
Exactly!
If somebody is going to unload the newly-purchased vehicle (or computer, or furniture, or… ) quickly, then depreciation is indeed a factor. For those of us who buy things for the long term, depreciation is a non-issue.
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Less than what you would think. New is new and the cars will be comparable. Most of the savings would be from the dealer wanting to move the iron and reduce the interest cost on the note for the car, but it’s not like you will save a whole lot, plus you will have a used car some day that is a year older. Just buy the car you want and if it’s a leftover, fine.
I have frequently purchased new cars at year end, dealers want to get them off the lot and are willing to deal. I own them for a long time so depreciation is not part of the equation.
There is only one time in my life that I considered buying a new vehicle and thankfully changed my mind at the last minute on a new Subaru. The thought of depreciation took over and I got cold feet.
I’ve always used patience to look for a decent older used car and they have always served me well.
In some cases I’ve had the opportunity to buy a nice clean vehicle with a major problem and repair it. One was a veryh slick Subaru wagon with a bad engine for 700 bucks. I was in the process of building an engine at the time so inside of a week and after work it was up and going. It served me well for almost 300k miles over 13 years.
My late wife loved that car even with a stick shift.
In my conclusion it depends on the discount at purchase and how long you plan to keep the vehicle. I keep them long enough the price between a 2019 and 2020 even if it was $1k difference I would still go for the savings unless there were features that made the 2020 a happier choice. Clear as mud!
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I think I fully agree if you are buying the car outright. If you are leasing or financing, and there is going to be a larger gap between the depreciated value and the amount financed, I think you are better off with the 2020. But again it depends upon how much of a discount you can negotiate.