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Should you buy a 2012 car lingering on the lot?

It's the end of the year, and despite the fact that some 2013 models have been on dealer lots since March, you'll find a small number of 2012 model-year leftovers. The question is: Should you bite?

Well, it can make a lot of sense. After all, automakers are highly motivated to move the old metal, which usually gives you room to negotiate a good price.

That said, remember a leftover is only a good deal if the car or truck hasn't been significantly changed.

Consider the Chrysler 300. For 2012, it received a number of significant upgrades that dramatically improved the car and makes it well worth considering.

For 2013, changes are relatively minor and there's a $1,500 rebate. But opt for a leftover 2012 model, and rebates range from $3,000 for the 300 to $4,000 for the Hemi-powered 300C.

Not bad.

With most rides, zero percent financing is more likely. General Motors, Ford, Chrysler, Honda, Toyota, Nissan, Hyundai, Kia, Mazda, Subaru and Volkswagen are offering it. Tonier brands are offering 2.9 percent or less interest on certain models.

Zero percent financing is a particularly good deal for one simple reason: You're borrowing money for free. So the price you agree to pay when you buy a car or truck is the price you've paid after the car loan is fully repaid.

Consider a $25,000 car financed for 60 months. According to the loan calculator at auto information site edmunds.com, your monthly payment at 6.99 percent interest is $495 a month; at zero percent, it's $417. Doesn't sound like a big difference, but that's $4,680 over the life of the loan in interest payments.

In most cases, given a choice of interest-free financing or a rebate, the zero-percent financing makes more sense.

Even if you can pay cash for that new car or truck, why would you? Save the money, get whatever interest that you can on the cash that you would have laid out, and pay over time. It costs you nothing because there's no interest.

Some examples:

• The 2013 Ford Focus can be had with interest-free financing for 60 months, plus $395 bonus cash or $2,895 cash back.

• The 2012 Nissan Murano also gets zero percent financing for 60 months plus $500 cash.

• The 2012 and 2013 Chevrolet Silverado 1500s and 1500 Hybrids have zero percent for 60 months plus $1,000 cash.

Don't forget that in many cases, military personnel receive additional rebates, typically $500 or so. The same goes for college graduates.

But remember: Buying a leftover means buying a vehicle that's already considered a year old, so it has already depreciated. If you trade vehicles often, this might be enough to kill the deal.

Also, don't expect a car or truck to have exactly the options you want or the ideal color combination.

Finally, don't opt for the leftover if a new model offers new safety gear. You might be tempted to get the older model and save some money. But new items like blind-spot detection, stability control, extra air bags or a rear-view camera can help keep you safe every day. And you can't put a price on that.

Should you buy a 2012 car lingering on the lot? 12/27/12 [Last modified: Monday, December 24, 2012 2:39pm]

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