You and I think of new year as being January 1st. But that’s not the new year for vehicles. Their new year is August, so you need to think of this month as being 2023 for their new model year. The factories started building them in March or so, in spite of the parts shortages, mostly related to computer chips.
Ford is currently running a national television ad that starts with the voice-over of: Is the deal a really great deal? OK, let’s take them up on that question. This isn’t about Ford, it’s just their cute catch-phrase.
In spite of the supply problems (which are now easing) there are lots of of 2022s for sale, too. Dealers are now on a big push to sell them, because they can’t send them back to the factory to be melted down. They have to be sold…although that’s certainly easier when some dealers have less than a dozen new vehicles on their lot…
If you’re buying last season’s clothing, you won’t be very trendy. But you’ll get a great price, and in the world of clothing it isn’t a big deal unless you’re a super-sensitive fashionable teenager. It matters a lot more to your wallet on a vehicle purchase. If you’re keeping it for 10 years or longer, and can pay cash, you may get a great deal, and all you’re missing is some of the 2023 model technology, which really isn’t a big deal.
Keeping a vehicle that long means you’re driving it down to a thousand bucks or so. But if you trade frequently, you’re going to be shooting yourself in the foot buying a 2022. The day you take delivery it’s a year old. So if you’re trading it in two years, you’ve actually got a three year old model and that has a huge impact on the value. That’s the reason over 40% of people who trade their vehicles owe more on their loan than it’s worth.
If you drive it into the ground and can afford a new vehicle, the 2022s could be a great deal for you. Start looking after the middle of September. That’s the month most manufacturers send around 5% of the cost of all old models in stock to the dealer to help them with advertising and price reductions. When that money comes through you’ll see the big wave of advertising and that should be your cue to start shopping while the selection is still pretty good. Between now and then, invest the $20 in the Money Tools book and just read the vehicle buying chapter. That’ll turn into a few thousand once you start shopping.
Or you can skip this altogether and do what I do: Drive your vehicle forever – and then another year or so after that. Assuming it’s reliable and you do the maintenance, there is literally nothing that will save you more money. Sure you can skip buying the odd coffee or the bigger dollars by skipping one or two restaurant visits. But nothing comes close to what you’ll save in car payments and depreciation by driving your current vehicle. I know, because yesterday I celebrated my 300,000th anniversary with my 2007 Ford Fusion.