The largest discounts on a new vehicle usually appear at the end of its production life rather than during it. The mechanism is simple and it repeats with every model cycle.
The announcement changes the vehicle's position instantly
Nothing physical happens to a vehicle when its successor is revealed, but its position in the market changes immediately. It becomes the old model in the buyer's mind.
Demand falls accordingly, while the dealer still holds stock ordered under the previous expectation of demand. Price is the only tool available to reconcile the two.
Manufacturers usually support this with run-out incentives, because unsold outgoing stock competes directly with the new model they need to launch cleanly.
The discount arrives in stages
Early in a run-out, reductions are modest and often disguised as specification upgrades or finance contributions rather than price cuts.
As the launch date approaches, the incentives become explicit, and the least popular colours and trims move first because they are the hardest to shift.
The deepest reductions typically appear once the replacement is already in showrooms, at which point remaining stock is competing against a vehicle sitting a few metres away.
What the buyer actually receives
A run-out vehicle is usually the most developed version of its generation, with production faults resolved and specification improved over the life of the model.
It is also a known quantity. Reliability patterns, running costs and common faults are documented, which a newly launched model cannot offer.
Parts availability and independent servicing knowledge are both mature, which reduces the friction of ownership in ways that do not appear on a price list.
Depreciation absorbs part of the saving
Because the market recognises the vehicle as the outgoing generation, its used value falls faster than the incoming model's in the first years.
Some of the discount is therefore not a saving but a transfer, with the buyer paying less at purchase and receiving less at resale.
The net position depends on how long the vehicle is kept. Over a short ownership the effect is significant, and over a long one it largely disappears.
Some replacements make the old model more attractive
Where a successor changes direction, growing larger, dropping a body style or moving to a different powertrain, the outgoing model can retain demand it would not otherwise have.
Buyers who specifically want the earlier configuration will pay for it, which supports used values and undermines the usual run-out discount.
This is why run-out pricing varies so much between models, and why the size of the discount says more about the replacement than about the vehicle being discounted.