The Leftover Model-Year Break-Even

The penalty is one year at the wrong end of the curve

The standard warning against buying last year's model is that the car is a year old the moment you sign, as if a year of depreciation were charged in the showroom. Luxemetry's own retention data says the cost is real, much smaller, and paid at the other end of the ownership.

A leftover is a zero-mile car one model year behind. The model here is the obvious one, built on the site's retention curves: when you sell after three years, the market reads the door jamb and prices the car one year further down the curve — year-four retention instead of year-three, as a fraction of the original sticker.

That makes the break-even arithmetic short. The leftover must be cheaper by exactly the resale gap it will suffer, so against a new car at sticker, the break-even discount is year-three retention minus year-four retention.

Both buyers pay year one in full. An S-Class is modeled to shed $33,880 — 28% of its $121,000 sticker — in its first year regardless of which model year is on the registration. The leftover's whole penalty is one extra year out at the flat end of the curve.

The G63 and the i7, one point apart

Apply that across the dataset and the result is monotonous. For a three-year hold, the break-even discount is 5 or 6 points of MSRP on nearly every car in the data — the outliers span just 3 points on a Chiron and 7 on a McLaren — and a G63 that keeps 85% at year three and an i7 that keeps 43% are one point apart.

The reason is the shape of the curves. Fast and slow depreciators separate mostly in year one, which both buyers pay, and by years three through five nearly every profile in the data flattens to a similar 4-to-6-point annual step.

Dollars still scale with sticker: 6 points of a Ghost is $23,280, while 6 points of a Taycan is $6,360. And the number that actually sorts the table is the last one in each row — what the current model year is modeled to transact for.

• G63 AMG. Retention 85% at year three, 80% at year four. Break-even vs sticker: 5% ($9,775). The new one is modeled 8% over sticker, so a leftover at plain MSRP is already $5,865 ahead over three years.

• 911 (Carrera-class). Retention 75% / 70%. Break-even vs sticker: 5% ($8,750). Against the modeled 1% street discount on a new one: about 6%.

• Ghost. Retention 61% / 55%. Break-even vs sticker: 6% ($23,280). Against the modeled 3% street discount: about 9%.

• S-Class. Retention 52% / 46%. Break-even vs sticker: 6% ($7,260). Against the modeled 8% street discount: about 14%.

• Taycan. Retention 47% / 41%. Break-even vs sticker: 6% ($6,360). Against the modeled 9% street discount: about 15%.

• i7. Retention 43% / 37%. Break-even vs sticker: 6% ($7,680). Against the modeled 13% street discount: about 19%.

The break-even is a spread against the new car's transaction price, not a discount off its sticker. A leftover at 10% off beats a new car at MSRP everywhere in this table — and still loses by $4,840 to a new S-Class already modeled at 8% off.

What fall discounts actually clear the bar

New model years land between late summer and early fall, and discounting on the outgoing year peaks roughly September through December. Closeout guides tell buyers to target 15% to 20% off sticker on true leftovers, and the deepest observed cuts cluster in luxury sedans and EVs.

Map that onto the break-evens and the pattern inverts the folk wisdom. The fast depreciators need the big numbers — a modeled 14% on the S-Class, 15% on the Taycan, 19% on the i7 against their street prices — and they are precisely the cars that sit on lots long enough to get them.

The slow depreciators barely need a discount at all. A 911 breaks even at about 6% against its modeled street price, and a G63 — modeled at 8% over sticker when new — comes out $5,865 ahead over three years at plain MSRP.

Finding one is the constraint. Cars retain value because production runs short of demand, and short production does not leave leftovers on the lot in November. The discount and the retention rarely coexist.

The bar moves with the holding period

The 5-to-6-point bar is a three-year number. Flip in two years and the break-even widens where the curve is still steep: about 8 points of sticker on a Ghost, 9 on an S-Class or a Taycan, while the G63 stays at 5. The faster the flip, the more the model year costs.

Keep the car five years and the bar drops to roughly 4 to 5 points everywhere, using the site's extrapolated year-six retention. Keep it a decade and the modeled penalty falls to about 2 to 3 points. A model year matters exactly as much as you plan to be judged on it at resale.

One assumption to respect: the model treats the leftover as the same car one year back. In a redesign year it is not — the outgoing generation typically falls faster than these profiles, and the break-even should be padded well past 6 points.

In the showroom, work in this order: price the current model year first, then require the leftover to beat that street price by at least 5 to 6 points of sticker for a three-year hold. Check the in-service date before counting the warranty, since coverage generally runs from first sale or dealer in-service, not from the model year. Then run both cars through the depreciation calculator with your own holding period.

Three desks: live lease sheet, calculator, methodology

I keep three sheets on this desk. A leftover model-year discount only helps if the residual and money factor still clear the break-even already shown on this page.

Run the same car at https://luxemetry.com/lease-calculator and https://luxemetry.com/lease-vs-buy before treating a year-end sticker cut as free money.

How those comparisons are built is on https://luxemetry.com/methodology .