Not sure if this is the right area for the question but I am buying a new honda accord 2014 ex-L v6 2014 model. My question is does the value of the car depreciate because it is last years model even though it has not been used. This years model is 2015 which will become old in 4 month.
Thanks
In the typical term of depreciation, no it does not ... the sticker price is still the sticker price. There are three main factors which will depreciate a car: if it's used, how old it is, and its mileage. The adage of a vehicle losing so much value when it leaves the lot is due to you purchasing it. Once you have purchased it, it is now "used". It doesn't matter that you have not put any appreciable mileage on the vehicle yet, it's still used. The year, being in the current calendar year, will not affect it. When the calendar rolls over to 2015, then you'll see a hit. Mileage is self evident as to a depreciation factor. This is actually the second biggest factor in depreciation after the used/new status. Usually every 10k miles the vehicle will take a bigger hit.
As far as buying the previous MY vehicle in the current calendar year, if you don't negotiate, you might expect to pay the sticker price. There are a couple of things which will modify the price and help to bring down the buying cost from what you'd expect from the current MY.
First, dealerships have incentives to sell a car as soon as possible when they arrive on the lot. In most dealerships, they have to purchase the cars which come on their lot from the manufacturer. They do not put up their own money, but utilize a standing "loan" (I believe it is called differently, but this term still fits and is understandable to most). The total loan amount can be several million dollars, depending on the amount of inventory the dealership holds. As a car is brought onto the lot and processed, the dealership has to pay the interest on the loan. As an incentive for the dealership to purchase the cars, the auto manufacturer provides a stipend which covers about three months of interest on a given vehicle. The sooner the dealership sells the car, the more money they retain from this stipend. If the dealership has the car on their lot for longer than this period, it is costing them money. The dealership will lower their prices to "cut their losses". Toward the end of the year this becomes very prevalent and price cutting is in vogue. People who want a "new" car are wanting the current MY, especially if the sticker price has not come up that much from the previous MY.
Secondly, the manufacturer may have left over cars from the previous MY they need to off load. They will send out notices to their top dealerships asking if any want the cars. The manufacturer will give dealerships extra incentives to sell these types of cars. The dealerships will sometimes pass these incentives onto the consumer, but most of the time the manufacturer will also have rebates or interest rate promotions which help sell the cars.
Either way, the consumer wins if they don't mind last years model, but the consumer needs to do their homework and be informed.
Yes, it does. Not by as much as if you bought it, but you'll usually see old stock advertised at discounted prices.
