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How will the new models arriving affect prices of the 2010 vehicles on a lot?
Using past model years as a guide, the arrival of 2011 models should drive down the transaction prices on remaining 2010 models in stock because some buyers will pay more to get the newest versions, the latest features and the higher resale value.
How steeply prices decline on leftover 2010 models can hinge on a number of factors, including whether the 2011 versions are redesigned or significantly different, how many 2010s a dealer still has in stock and how big the incentives are. In addition to customer incentives like rebates and low- or no-interest financing, manufacturers often stoke year-end sales by giving incentives directly to dealers to encourage them to cut prices, sell old inventory and make room on their lots for new models.
However, automakers have stopped producing more vehicles than they can reasonably expect to sell, so inventories are relatively lean compared with previous years. That means they probably won't need rampant discounts. Still, if you bide your time shopping for a 2010 model, transaction prices should drop further because dealers won't want to keep paying interest on their unsold merchandise. The longer you wait, though, the fewer choices you'll have.
July 13, 2010