What is a Leftover Model?

Towards the end of each year, it's common to see car commercials touting great deals on leftover models. These are vehicles that have not yet been sold when the next year's models start arriving on dealer lots.

The new models usually start arriving between August and November of each year, but some arrive much earlier so don't assume leftover models are only found towards the end of the year.

For example, there were some years when BMW and Ford would introduce the next year's models as early as April. In more recent years, due to supply constraints, we've been seeing the newer model years being introduced more towards the end of the year. Manufacturers want dealers to sell leftover models as quickly as possible so they don't take demand away from the newer models.

One key aspect of leftover models is that there are limited quantities. The manufacturer typically stops production a month or two before the new models arrive on dealer lots, giving themselves time to re-tool the factories for the next model year.

Since there is a diminishing supply of leftover models, car shoppers need to weigh the consequences of waiting too long against the likelihood of price discounts. Typically, the longer you wait to buy a leftover model, the better the deal.

But there are two downsides to waiting too long: First, the colors and options you desire may not be available since the least desirable units are left for last. Second, the longer you wait, the less the car is worth due to depreciation.

A leftover model is essentially treated as a 1 year old vehicle, even if the model year is current. Therefore, it's not a good idea to buy one unless you plan on keeping it for more than 5 or 6 years. Otherwise, the depreciation cost will be hard to absorb.

The advantage to buying a leftover model is, of course, the deep discounts you can get. I've seen cash rebates and hidden dealer incentives as high as $10,000 on some slow-selling leftover models - usually ones that have been sitting for months, and sometimes even over a year.

But this doesn't mean that every leftover model will come with a great deal. Some leftover models sell well without the need for incentives, especially if the next model year is a carryover, or if there is low supply to begin with due to production issues. The best deals on leftover models are found when the new model has been redesigned. This usually occurs once every 4 to 5 years.

If you don't mind driving an older design, and plan to keep the car for a long time, your best bet is to buy a leftover model when a redesign occurs.