How to buy a demo car
Dominic Beattie
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- Buying a demo - or demonstrator - car instead of a brand new one can save you thousands of dollars
- But there are different types of demo cars and you'll need to be clear on how the car has been used previously
- There are many upsides to buying a demo car but they should be weighed against potential risks
What is a demo car?
Demo - short for demonstrator - refers to cars at new car dealerships that have less than 5,000 km on the odometer. They're usually showroom cars that prospective buyers have taken for a test spin or that sales people may have driven to familiarise themselves with the model.
Types of demo cars
It's important to note not all 'demo cars' are the same. The term can refer to a number of scenarios:
Demo runout model: When a car manufacturer is about to introduce a new model, dealers like to move out older models. If you aren't wedded to having the latest model car, you can save thousands on a runout model - and even more if it’s a demo runout that's already been driven.
Courtesy car: These are cars some dealerships provide to customers when they bring their own cars in for servicing. Buying these cars can come with added risk as they've been driven without a dealership staff member in the car. But with such risk usually comes a considerable price discount.
Dealership demonstration car – These are the most common demo vehicles. Such vehicles are generally on the dealership floor and may be taken out for a spin by prospective buyers as well as driven by dealership staff.
Buying a demo car checklist
Because a demo car is not new, you should essentially treat it as a second-hand car when enquiring. Make sure you ask the dealership:
What is the car's history?
Is there any damage/wear and tear on the car?
How much registration is left on the car?
Is the car still under warranty and how long is the warranty for?
How much is the brand new version of the car?
For peace of mind, you might want to enlist the help of your own inspection service, say a mechanic or a motoring body.
Under Australian consumer law, all cars sold at dealerships in Australia should come with a roadworthy and a statutory warranty.
Why are demo vehicles cheaper than new cars?
It's common knowledge that as soon as a car is driven off the lot, in any capacity, its value immediately depreciates. This also applies to demo cars.
Typically, once a demo vehicle has driven more than 5,000km, it is classed as second-hand or used. Dealerships are generally keen to offload them before their odometers hit the benchmark mileage.
Savings.com.au's two cents
In short, demo vehicles can save you an absolute packet on a car that's close as you'll get to new. From a website that's dedicated to savings, buying one instead of a new vehicle is a no brainer.
Purchasing a demo vehicle can also put a bit more power in your hands when it comes to negotiating a good price. Bear in mind, the dealer most likely wants the car gone as soon as possible, especially if those kilometres are creeping up there.
Always do your research on the car and make sure the price you're being offered is fair and reasonable compared to the new version and compared to what else is available at that price on the market.
Driving out of a showroom in your demo car can still give you that new car experience, but with a lot more cash in your pocket.
Pros and cons of buying a demo car
Pros
- Cheaper price: It's hard to go past the significant discount in buying a demo car over a brand-new version of the same model. And because it's not new, you may also have some traction in negotiating an even lower price.
- Mint condition: Demo cars that have been showroom vehicles are generally in excellent or near-new condition. After all, they were used to entice prospective buyers.
- Added features: In the same vein, demo cars often have all the added extras, such as leather interior, sunroof, and other add-on accessories, over basic models - and at a reduced price.
- Low mileage: For what's essentially a second-hand car, demo vehicles generally have very low mileage on the clock.
- Ready to drive away: There is no need to wait to take possession of a demo vehicle. You can generally drive it away the same day the sale is complete.
Cons
- Shorter warranty: A manufacturer's warranty starts from the first date of registration or when a dealer puts the car 'in service' in the case of demo vehicles. It's worth checking the exact date so you know how much of the warranty period has already lapsed.
- Less choice: Dealers generally don't have a selection of demo cars and you'll have little choice about colour, extra features, even fuel types. Weigh up if the price discount will still get you the car you want.
- Not the first owner: The fact it's not technically a one-owner car may affect its resale value down the track.
- Some wear and tear: Despite the vehicle being near-new, there will be some wear and tear from being driven, potentially for a few thousand kilometres.
- History: You'll never really know how the car was 'tested' on its test drives or how harshly it was driven, despite what a salesperson may claim.
Saving even more
If you're looking for finance for your demo car purchase, a competitive car loan can see you save even more. The table below features some of the lowest rates on the market and is a good place to start.
Lender Car Loan Interest Rate Comparison Rate* Monthly Repayment Interest Type Vehicle Type Maximum Vehicle Age Ongoing Fee Upfront Fee Total Repayment Early Repayment Instant Approval Online Application Tags Features Link Compare Promoted Product Disclosure
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