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It long ago ceased to be news that
the new-car industry is in disarray. It looks
like overall car and truck sales will fall to
levels not seen since the early 1990s, and manufacturers
are offering all manner of incentives.
But one thing that may surprise shoppers when they go to a dealer is that it's possible
to find 2007, 2008 and even 2009 versions of the same model on the lot, all carrying various incentives
to lure buyers.
Consider the Toyota Camry.
Dealers have 2009 Camrys -- which are largely unchanged from the 2008 model -- on sale
with regional cash rebates of as much as $750 or cut-rate financing of 1.9 percent to 4.9 percent.
They also have 2008 Camrys, which carry regional cash rebates of as much as $1,000 or
discounted financing of zero percent to 4.9 percent. Some dealers even have 2007 Camry Solaras -- the
two-door coupe version -- with rebates of up to $2,000.
How is it possible to have three different model years on sale at the same time? Such
circumstances are a result of declining sales and aggressive marketing.
Over the last two decades, the exact parameters of an individual model year have changed.
Where cars and trucks were usually dated from September to September, manufacturers have been moving up
introduction dates.
So a car introduced in January 2008
can be labeled a 2009 model and remain on sale
as such until the fall of 2009. Manufacturers
do this to add some fresh appeal to a car or truck,
or to trump competitors by appearing to have the
latest and best vehicles before anyone else.
But when sales aren't booming, dealers can wind up being stuck with a lot of the previous
year's models that they have to try to sell side-by-side with that early new year version. And in today's
tough climate, a lot of 2007 models continue to languish on lots.
Mitsubishi is struggling to move
the new 2009 Galant, offering a $1,000 rebate
or zero percent to 5.9 percent financing, while also
trying to sell leftover 2007 Galants by offering
a $3,000 rebate or financing ranging from 1.9
percent to 4.9 percent.
While Detroit-based manufacturers don't have any 2009-2008-2007 traffic jams yet, they do
have a large backlog of 2007 models competing with the 2008 models.
Buick is offering a $1,000 rebate
or 2.9 percent to 6.9 percent on the attractive
2008 LaCrosse sedan, and has loaded rebates of
$2,000 to $2,500 or zero percent to 6.9 percent financing
on leftover 2007 LaCrosse models.
So what should a shopper take from this?
When it comes to the 2007 models, there should be at least a $3,000 gap between the cost
of a 2007 and the purchase price of a 2008.
Also, shoppers considering a 2007 model should be in it for the long haul -- they should
plan on keeping their vehicles for five or more years to offset the greater drop in value that a '07 vehicle
will show right from the start.
The equation between the 2009 and the 2008 model of the same vehicle is a little more
complicated. In general, if the '09 model is significantly upgraded or restyled, it's worthwhile to opt
for the newest model, especially if you tend to get a new vehicle every four or five years.
If the 2008 model is nearly identical to the '09, and if your trade-in period is five years
or more, drive a hard bargain on the '08.
Overall, keep in mind that right
now it's a buyer's market.
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