Should you buy a 2 year old leftover car

April 24, 2008 5:45 AM

Is there any down side to buying a 2006 leftover vehicle?

With gas prices continuing to climb, I figure now is as good a time as any to get rid of my 10 year old gas guzzling SUV for something that is more economical at the pumps.

Normally I buy used, but it seems that there are some great warranties and incentives on new domestic cars right now. i was looking at '07 leftovers since there are some pretty aggressive deals to be had, stumbled accross a lot that still has a brand new '06 that they are willing to sell for about $11,000 below sticker. (Sticker is $38k)

I can't think of any downside to buying a 2006, except maybe that the fluids may all need to be replaced due to it sitting so long.

Have any of you ever bought a new veichle that was two or more years old? did you have problems? Is there a downside to doing this?

posted by Mr_Chips to Travel & Transportation (15 answers total)

I'd have them throw in a new set of tires, but otherwise it actually seems like its not too bad a deal. You get all the benefits of a new car, with a third off. The fluids will have been changed (or you should have them change them). The deal seems "too good to be true" but really the dealer has a majort incentive to move the stock off the lot. You might even see if you can go lower on him, because he's got to get rid of this thing.

I always look for cars in this sort of dealer catch 22 situation, like a low mileage used car of a competitor's brand traded in and festering on the lot because the dealer can't promote it otherwise he'd be promoting the other guys and he can't sell it to another dealer because he may have to take a loss.
posted by Pollomacho at 6:01 AM on April 24, 2008

The only real downside is that after you drive it for a month, it is worth what a two or three year old car is worth, not what a one-month old car is worth. So be sure that even $11,000 off is enough to make up for the amount it has depreciated sitting on that dealer's lot.
posted by Forktine at 6:16 AM on April 24, 2008 [1 favorite]

Yeah, but immediate resale value is not equivalent to long term worth for someone who keeps their cars for ten years. I think it's a no brainer decision for Mr. Chips. Oh, actually there is one downside. If you total the car, what will your insurance company pay you? The price you negotiate should be close to that.
posted by BrotherCaine at 6:22 AM on April 24, 2008

20% depreciation per year.

Offer 14,000 below sticker take 12,500 below and go home with the new to you car.
posted by Beaufort at 6:55 AM on April 24, 2008

I'd to check with your insurance about how they would value the car if you totaled it.
Also, make sure you don't get upside-down on the car loan and you should be fine.
posted by wrnealis at 6:55 AM on April 24, 2008

I bought a 2004 'leftover' in early 2005 (about this time of year actually); basically a new car but at the price of a used one, and it's worked out great.

I would have dickered with them about the tires, but it had just gotten new ones (as the result of a recall) a few months prior to me picking it up. Other than that and the fluids, I can't think of any reason why you wouldn't want to go for it.

Just don't pay for it as it it was a new car; pay for it like it's a used car with virtually no mileage on it. (In other words, let the dealer take the "driving it off the lot" new/used hit.)
posted by Kadin2048 at 7:29 AM on April 24, 2008

How much has it been driven? Make sure it wasn't a loaner or a dealer demo while it was sitting on the lot the last few years.. . ..
posted by tiburon at 8:59 AM on April 24, 2008

Every time I buy a car I always buy a new, previous year model. There are no downsides to this other than saving money. My insurance company has a small ($3/month ) surcharge that when a new car is bought (current or past year model) the car is replaced with a brand new vehicle for the first three years. I suggest only that you make sure that the price that you pay for the car is the same as or less than buying that car used. This is a great way to save a lot of cash and get a car with an excellent warranty (as long as you don't mind driving an American car).
posted by saradarlin at 10:22 AM on April 24, 2008

Make sure they didn't use it as a parts car, too.
posted by zippy at 10:23 AM on April 24, 2008

Seconding to check the mileage. Loaners and dealer demo cars can take a lot of abuse. Abuse you really don't want placed on the engine if it has a break-in period.

And the tires. Have them throw in new tires.

Get an oil change. Depending on the lot policies, the oil that's in it may be the original from the factory. That would be my biggest concern - if the engine sat for a long time between periods of activity. Some engines don't like this.

But otherwise, it can be a great deal. My boss just bought a 2006 remainder with < 100 miles. Works great, no problems.
posted by krisak at 10:25 AM on April 24, 2008

Usually the leftover cars are from a less-desireable manufacturer (Chrysler, for example, has become somewhat notorious in recent years for poor inventory planning). This would mean low resale value, even with low miles.

I would check to see what a used version of the car in good condition sells for, and not pay much more than that.
posted by Ostara at 10:55 AM on April 24, 2008

Response by poster: I just got an email back from the dealership, they say it has 531 miles on it, never used as a Demo.

I plugged the year/make/model options into Kelly Blue Book, except listed it as used with 1,200 miles on it, and they spit out a retail of close to $20,000 ( sickening to think a car that was new two years ago is worth slightly better than half two years later with less than 1,500 miles on it just because it was titled!)

I'm not really worried about it's residule value, as I usually keep my vehicles long enough for it not matter. I am more concerned with the overall value and because this vehicle carries a lifetime powertrain warranty for the original owner, it makes buying new that much more tempting.

Waiting for my insurance agent to get back to me on how they will value it.

Thanks all
posted by Mr_Chips at 10:57 AM on April 24, 2008

It sounds like one of those cars I see around town that have the DLR plate stuck on with magnets. I always see them driven by an older sales guy or manager type. Typically they look like they're not abused by people wanting to see how fast it can go before buying. However, I always wonder if they're bothering to do the oil changes and other maintenances.
posted by krisak at 1:44 PM on April 24, 2008

531 miles? Are you sure it wasn't bought and then returned? In CA we have a three day cancellation clause, I'm not sure about your state. Anyone know if Carfax tracks that sort of thing?
posted by BrotherCaine at 7:28 PM on April 24, 2008

Response by poster: I think if it was purchased and returned, it would still have had to be titled. I also think they can't legally sell a car that has been titled as new.

I am much more inclined to think a salesmanger took the car on a family road trip.

I'd ask, but I'm sure they will just tell me what I want to hear ( they ARE car dealers).
I would expect them to say something like " when a car sits into the next model year, we make it a point to drive it about 10 miles a week so the seals and tires don't dry rot."

an answer like that would be tough to argue with!!

For that matter, I guess if the car averaged 1 five mile test drive a week over the two years+ the dealer had it, it would have more than 531 miles on it
posted by Mr_Chips at 5:38 AM on April 25, 2008