Buying a used vehicle typically saves you more money simply due to the depreciation that new cars go through upon leaving the dealership lot. However, there are several other ways that buying used can help you save money and get you more for the money that you do spend. One of the ways buying used saves you money is that you can often get more features for less money when you pay attention to the model cycles of vehicles you’re interested in. For example, if you buy a vehicle a few years older than the latest model, you can likely move up to a higher trim for less money.
The average buyer may not know about model cycles and how they work, so this post will explore some of the terms and what to look for.
The Model Cycle
Not every vehicle follows the same pattern, but most new vehicles get a full redesign every four to six years. Sometimes, the cycle goes longer than six years. In between complete overhauls, many vehicles get face-lifts to keep up with new tech and keep the design looking fresh. Every car company employs some version of a model cycle.
Redesign vs. Face-Lift
A face-lift is generally a small update to a vehicle to keep it looking modern and to stay updated with the competition. You might see things like new paint colors, new tech, new bumpers, updated headlights or minor new features. You don’t usually see things like new engines or entirely new trims in a face-lift year. On the other hand, a redesign means that the whole vehicle is overhauled. This is where you get new trims, new engines, new interior and new exterior styling, among other upgrades.
You can think of a face-lift like remodeling a few rooms in your house. A redesign is more like building an entirely new house. When a vehicle is redesigned, it is entering a new generation. For example, the Jeep Wrangler moved from the JK generation in 2018 to the JL generation. The new generation offered a new engine and new features not found in the previous generation.
Why Pay Attention?
As a buyer, paying attention to the model cycle in the automotive world can help you get more for less. It can also help you make an informed decision on what to buy and when to buy it. For example, if you know that a car model is about to enter a new generation but you still like the previous generation, you can set yourself up to save a lot of money. When the new generation of a vehicle arrives on dealer lots, they tend to steeply discount the outgoing generation to get rid of them. These discounts can be especially good at the end of the year.
Benefits of Buying Outgoing Generations
There are multiple benefits to buying the last model of an outgoing generation when a new generation hits the lot. One of the biggest ones is obviously the price. However, you also have solid reliability figures to go by. By the time a vehicle hits the end of a generation, it should have a good six years of reliability history to look at. Not only that, but the last model year of a generation has usually benefited from all the additional tweaks and fixes from the manufacturer.
You’re likely to see a lot of styling improvements, such as some extra power and more features from when the model debuted. Manufacturers often put some of the final model year features into the incoming generation as well. For buyers, this means that you can usually get a lot of what’s on the debut model of a new generation for a lot less.
How to Save Money by Watching the Model Cycle
If you’re paying attention to model cycles, you can look for models that are about to be updated into a new generation. If you’re not paying attention, you might end up paying too much on a vehicle that is about to be completely redesigned. For example, if you buy a vehicle that’s about to be redesigned, you’ll end up paying the current market price of it. If you wait for the new generation to hit the market, then you’ll likely get a big discount.
Another reason to look at model cycles is resale value. Maybe you want the new generation of a vehicle but can afford to wait a few years. If you wait to buy the new generation a few years after its debut, you can get better resale value than if you had simply bought the outgoing generation. On the other hand, you can save substantially on the old generation.
For example, the 2012 Ford Fusion base model began selling for an average of $15,300 after the Fusion was redesigned for 2013. The new 2013 models were selling for an average of $19,400, which is over a $4,000 difference. If you go to higher trims, you’d likely be paying even more for the new vehicle. On the other hand, you could use that $4,000 toward a higher trim on the old model.
It’s also important to know the market for certain vehicles. For example, the 2019 Ford Escape is about $3,000 less than a 2020 Ford Escape. On the other hand, the Ford Explorer is roughly $700 less between the 2019 and 2020 models.
How to Find Vehicles About to Be Updated
You may have to do some investigating to find out when a vehicle is about to be updated. New generations are usually announced well in advance on automotive news sites. If you want to know about the generations of your prospective vehicle, simply search for the make and model and generations. Popular auto sites can tell you all about the generations, including their time frame and features. They may also mention that a new generation is coming.
Consider Your Preferences
Another aspect of buying an outgoing generation when the new one debuts is that you might get your perfect vehicle for a lot less. Sometimes, new generations appeal to a whole new type of customer. For example, the 2019 BMW 3 Series discontinued offering a manual transmission. If you love the 3 Series and want a manual transmission, you would be out of luck with the new generation. On the other hand, you could then get the old generation for less.
In another example, the Subaru Forester was redesigned for 2019 and featured a bevy of new tech and features. However, the outgoing generation was also packed with safety tech very similar to what was offered in the new model. You would naturally save money and still get a lot of features by looking at the 2018 Forester versus the new one.
Suppose you’re looking for a Porsche 911. The new generation debuted for the 2019 model year and had a zero-to-60 time of 3.5 seconds. However, the outgoing 911 Carrera S had a zero-to-60 time of 3.9 seconds, which isn’t a huge difference. The money you would save on the outgoing Carrera S would likely make up for the extra speed.
In the previously mentioned Jeep Wrangler generation, the new JL had an MSRP range of between $21,000 and $40,000. The outgoing JK generation had an MSRP range of between $20,000 and $33,000, which is a sizable difference at the higher end of the range. If you planned to spend $30,000 on a Jeep Wrangler, you would likely get more for your money by buying the last model year of JK versus the new JL.
On the other hand, if you wanted a turbo-diesel or turbocharged four-cylinder, you wouldn’t find it on the JK. That’s why it’s important to know what you want and pay attention to the model cycles and generations that have what you want.
Some Brands and Models Hold Higher Value
The other detail that’s good to know about buying used vehicles versus new is which models and brands tend to hold value longer. Some vehicles lose significant value in three years from being new, even if they’re in the same generation. Other vehicles lose very little value in three years from the newest model. Some examples of vehicles that lose little value include the Ford F-150, Toyota RAV4, Honda Pilot, Chevrolet Silverado and Toyota Highlander. In general, Honda and Toyota vehicles tend to keep holding value a few years away from new.
When a new generation debuts, it may not have all the kinks out. Remember that everything in a new generation model is usually totally new; the maker doesn’t know exactly how well everything will work out. When you buy older models, they have been extensively road-tested by drivers and have problems ironed out. At the very least, there is plenty of data available for how to fix any issues or how long cars can be expected to hold up. In other words, you’re buying a car with a proven history.
Ultimately, buying used instead of new can save you money, potentially getting you more features for less. Buying used can also get you a vehicle with a verifiable track record.