Buying a demo car.

Buying a cheaper car doesn’t have to mean giving up on the dream of a stylish set of wheels. Demo cars offer a nearly new car experience, with a more palatable price tag. But before you go and ‘bag a bargain’ there are important things to consider. So, we’ve done some of the research for you.

What is a demo car?

A demo car is basically a car that has been used be a dealer so it’s technically not brand new. These cars tend to be top of the range, latest models equipped with all the bells and whistles. Because demo cars can’t be classified as ‘brand new’, they’re generally sold at a discount. The types of demo cars you might come across include:

  • Dealer demos – cars used by dealers for test drives or promotions
  • Runout models – cars dealers want to sell quickly to make room for the next model
  • Courtesy demo cars – cars that get loaned to customers who bring their car in for servicing
  • Factory demos – cars used by the manufacturer at exhibitions and events or in commercials.

Before you consider making a purchase, it’s good to know what kind of demo car you’re dealing with.

Buying a demo car vs buying a brand new car.

When buying a demo car, it’s important to remember you’re still buying a used vehicle. So, you’ll need to ask the right questions and be thorough with your research. The number of kilometres on the clock is always a big consideration for a used car. While there are no hard and fast rules for demo cars, a good rule of thumb is to look for a demo car that’s within 2-3 months of arriving at the dealership, and has no more than 5,000km on the odometer.

The pros and cons of buying a demo car.

Just as there are pros and cons of buying any used car, there are some things to be aware of when buying a demo car. Let’s start with the good bits first:

  • Buying a demo car can save you a fair amount of dollars. Dealers looking to move demo model cars quickly often slash their prices to clear the stock
  • Demo cars are ‘nearly new’ and generally in good condition because they’ve been well looked after by the car dealer. And because demo cars are used to show off the latest car models, they often come with top of the range features
  • There are no wait times for delivery. Rather than wait weeks on end for your new set of wheels, you can often drive your demo car home same day.

Like any purchasing decision, there’s always a flipside:

  • Demo cars are not new vehicles, so they come with more kilometres and potential wear and tear than a brand new car
  • With demo cars, your choice is limited by what demo cars the dealer has for sale at the time
  • Demo cars have usually been driven by plenty of people before you, so they don’t have that newness that only comes with a brand new vehicle. If that bothers you, perhaps a demo car isn’t right for you.

How much should I pay for a demo car?

What you should pay for a demo car depends on the model you’re buying, and how much you can get that model brand new. Ideally, you’ll secure $2,000 – $3,000 off your demo car, on top of other discounts the dealer is offering. If you’re feeling patient, waiting for large plate clearances or end of year sales could give you more bargaining power. In the end, the better you are at negotiating, the better your chances of a bargain. Don’t be afraid to ask for a discount. The worst that can happen is the dealer says no.

Things to check when buying a demo car.

Here are 5 questions to ask any dealer before you buy a demo car:

  1. What is the car’s history? Make sure you understand how long the car has been a demo car. A good dealer should be transparent about how many demos the car has been used for. Has the demo car also been used as a courtesy car? Did the manufacturer use the demo car for their promotional activities? Get all the facts.
  2. Has there been any damage to the demo car? It’s good to get an official answer from your dealer, but make sure you thoroughly check the vehicle yourself. Don’t overlook switches, compartments, lights, paintwork, tyres and everything else you can think of before you buy.
  3. When did the warranty start? Make sure the warranty starts the day you buy your demo car, not the day it arrived at the showroom. If the warranty started months ago, you’ll lose that warranty coverage.
  4. Is the car registered? If so, find out when it was registered and who the registered owner was. The dealer should be able to provide paperwork for both warranty and registration.
  5. How much can you get a brand new version of the same car for? Showing the dealer that you’ve done your research and shopped around might incentivise them to shave a few more dollars off.

Before you buy your demo car.

Buying any car is a big deal, so make sure you take your time to thoroughly research car prices and do a full inspection. And before you part with your hard-earned money, make sure you’re giving it to a reputable dealer who won’t take you for a ride.

Ready to take the plunge with your new wheels? You might find our car budget calculator useful. It’s a handy tool to help you calculate what costs you’ll need to budget for. And, if the prospect of paying for your new car is a daunting one, our car budget calculator can help you create a savings plan that’s realistic for you.

This information has been provided without taking into account your objectives, financial situation or needs. Before acting on this information, you should consider its appropriateness, having regard to your objectives, financial situation and needs. All loans are provided by Beyond Bank Australia Limited, 100 Waymouth Street, Adelaide, SA 5000 ABN 15 087 651 143 AFSL/Australian Credit Licence 237856. © 2019.