Automakers charging more for less in 2003
By Lucy Lazarony • Bankrate.com

That leftover auto is looking better all the time.

It's the time of year when savvy auto shoppers score bargains by scooping up heavily marked-down 2002 cars, trucks and sports-utility vehicles. Automakers pump up incentives on 2002 models to clear lots and make room for 2003 models. And this year is no exception.

"As the model year progresses incentives tend to get higher," says Dave Mingle, president of Chrome Systems Corp., an automotive data company based in Portland, Ore. "We're basically in close-out mode for the 2002 inventory."

Leftover 2002 models tend to have lower prices and higher incentives than the 2003 models that are arriving on dealer lots.

And now there's another reason to give a leftover 2002 model another look. Some major automakers, including General Motors and Ford, are increasing prices and removing formerly standard features such as anti-lock brakes, floor mats and speaker systems from several 2003 models. So you may get even more car for your buck by buying a 2002 model over a more-expensive but less-loaded 2003.

Let's look at some examples provided by Chrome Systems Corp.

Let's start with the 2002 Buick Regal GS, which comes with a base MSRP of $27,115 and includes a Monsoon Speaker System and OnStar, an in-car telecommunications service. You would have to cough up an extra $1,890 to add those features to a 2003 model. Dual front passenger side-impact airbags are extra on 2003 models as well. Those will cost you another $350. All told, you'll need to shell out an extra $2,500 for a 2003 model comparable to the base 2002 model.

Throw in incentives, and the 2002 Regal looks even better. The 2002 Regal comes with a hefty $3,000 cash rebate vs. a $1,500 rebate on the 2003. Between the cash rebates and loaded-up options, choosing a 2002 Regal over a 2003 could save you a cool four grand.

The 2002 Pontiac Grand Am four-door Sedan SE has a base price of $17,135 and includes a four-wheel, anti-lock braking system, a rear spoiler and floor mats. Those items will cost you extra in a 2003 model. A 2003 model with all the trappings of the 2002 base model will cost $17,665, a $530 increase over the 2002 base price.

Both 2002 and 2003 Pontiac Grand Ams come with hefty cash rebates. There's a $3,000 rebate on the 2002 model and a $1,500 rebate on the 2003 model. By opting for the 2002 Pontiac Grand Am, you'd walk away with an extra $2,030 in your pocket.

The 2002 Ford Focus ZTW four-door wagon has a base price of $17,930 for 2002. A comparably equipped 2003 model will cost you $18,575, an increase of $645. And while a $500 cash rebate is available on a 2003 Focus, you can scoop up a $1,500 rebate on a 2002 model. Total savings for choosing a 2002 Ford Focus over a 2003 -- $1,645.

With that kind of savings, only a diehard music fan would choose the 2003 Focus, which comes with a MP3 player, over the 2002.

Ford made no major content changes between its 2002 and 2003 Explorers. Even so, opting for a 2002 model could save you a bundle. Choosing a 2002 base four-door, four-wheel-drive Ford Explorer XLS over a base 2003 model saves you $1,945 right off the bat. Toss in a hefty cash rebate on the 2002 model and your savings jumps to $3,945.

Not every automaker is charging more for less on its 2003 models. Some automakers have beefed up content in 2003 models with minimal price increases. Take Subaru.

Its Legacy four-door, automatic sedan comes with a base price of $20,095 for a 2002 and a base price of $20,295 for a 2003, a $200 increase. Remote keyless entry and a CD player, which would cost you an extra $870 to add to a 2002 model, come standard with a 2003. So choosing a 2003 Legacy over a similarly equipped 2002 model would save you about $670.

The five-door Legacy Wagon Outback has a base price of $23,965 for a 2002 and a base price of $23,845 for a 2003, an increase of $150. Heated mirrors and a CD player, which would cost an extra $1,195 to add to a 2002 model, come standard on a 2003. Choosing a 2003 Legacy Wagon Outback over a similarly equipped 2002 model would save you about $1,045.

With so many changes between 2002 and 2003 models, it's important to study each vehicle's equipment list carefully. You can do much of your homework online.

AutoTrader.com, Cars.com and Intellichoice let you pull up side-by-side vehicle comparisons of various makes and model years. These sites can help you decide what kind of car to buy and help you pinpoint differences in 2002 and 2003 models

Be sure to check out incentives as well. NADAguides.com, Intellichoice, Autoweb.com, Edmund's Automobile Buyers Guide, AutoSite, Autopedia, Kelley Blue Book and CarPrice.com are among the sites offering timely pricing information.

A big cash rebate or a rock-bottom financing deal could help swing your decision toward an older 2002 model.

If you're on a tight budget and you find a 2002 model of a car that you like, you're probably going to want to buy it.

Deciding between '02 and '03
Here are some other things to think about when deciding between a 2002 and 2003 model:

How long do you plan to keep the car? If you plan on selling or trading in the car in a couple of years, you may be better off buying a 2003 model. The reason? You'll get a better resale value when it's time to sell.

"Although you're going to pay a little more now, it's going to be worth that much more when you trade it in," says Jesse Toprak, manager of pricing and market analysis at Edmunds.com

If you plan to keep the car for five years and beyond, the car's model year isn't going to matter all that much when you finally trade it in.

How important is a car's color and styling to you? You may have a tough time getting a 2002 car, truck or sports utility vehicle in your favorite color and style. If your dream car must be in a certain hue and a precise style or you won't be happy, shop for a 2003.

If color doesn't matter to you, you may be able score a great bargain on a 2002 vehicle in an unusual color. Keep in mind an unpopular color that lowers car's asking price in 2002 will also lower the car's selling price in the future. So, if you plan on selling the car in a couple of years, you may want to select a car in a popular color such as silver, white, or black.

How's your credit? Only people with pristine credit are going to qualify for the latest round of zero-percent financing deals being offered on 2002 and 2003 models. If your credit is less-than-stellar, you'll want to focus on scooping up a hefty cash rebate instead.

Even if you do qualify for zero-percent, proceed with caution. There are plenty of pitfalls to avoid. This Bankrate.com article will show you how.

-- Posted: Oct. 1, 2002