Buying a demonstrator car

Demo cars typically come with the top-of-the-line features so the dealer can showcase everything you can get with the car, not just the base model features. Since they’ve been used by the dealership, you can often negotiate a competitive price that definitely beats the full price of a top-of-the-line model when purchased brand-new. 

However, unlike a brand new car, when demo cars are sold, they’re up to two years old rather than being the current model. Also, to be classified as a demo car and not a used car, they can only have up to 5,000 km on the odometer. 

Demo models will come with a new car warranty.  However, since the warranty begins at the time of registration, you’ll generally miss some of the time included when you purchase it. Usually, dealerships prefer to clear out demo cars within a few months of no longer needing them, so any time lost on the warranty period is considerably shorter. If the warranty is non-negotiable for you, and you don’t feel comfortable giving thsi up, you may want to reconsider buying a demo car.

Buying a new car offers you a range of options you don’t get with a demo. This includes choosing the paint colour, the interior colour and material, and any additional features and accessories. A demo car does come with all the top-of-the-line features, but you can’t pick and choose things like colour or accessories as it’s all been decided by the dealer when they got the car. However, because dealers often rush to get rid of any demo cars, they’ll offer considerable discounts on price. This is especially true when compared to buying a brand-new car with all the inclusions the demo has built in.

There are several advantages to buying a demo car that are worth weighing up, including: 

• Cheaper - It's often a lot cheaper than buying a new car especially given all the features of a demo car. 
  
  
• Top specs - It comes with all the top model specs, making it a good buy.  
  
  
• Decent condition - A demo car will also usually be in great condition. Dealerships will take good care of them and not want their customers to test drive a battered-looking demo car.
  
  
• Drive away - It's ready to drive home as it's pre-registered, and you don’t have to put your name on a waiting list. You just need to transfer the registration rather than go through the full process of first-time car registration.

Along with these benefits or advantages to buying a demo car, there are a few disadvantages, which include: 

• Less customisation - Dealerships will likely have just one demo model, so you won’t have any choice on the colours or features, although it will have all the top-line features.
  
  
• Wear and tear - There could be some wear and tear on the demo model, especially if it has been test-driven a lot.  So you should thoroughly check to ensure it's not significantly worn out.
  
  
• Tyres - Depending on the number of kilometres the demo car has clocked, there could be significant wear on the tyres. You may need to change the tyres sooner than usual.

Car dealers have contracts or agreements with different car manufacturers they choose to stock at their dealerships. As part of this contract, the dealer will have a minimum fleet of registered demo cars on hand. This fleet will include a selection of the most popular makes and models customers might want to test drive. 

The car manufacturer gives dealers a specific bonus contribution to each demo car they use in their dealership, usually between $350 to $1,500 on cars priced between $15,000 and $50,000.  Therefore, the dealer will be in a position to sell you these almost new demo cars at a more reasonable price than their brand-new counterparts. 

The discount on a demo car varies depending on multiple factors, including how long it’s been a demo, whether it’s been used for test drives or as a courtesy car etc. To ensure you get a good deal on a demo car, you should compare the prices at several dealerships. And also, carefully check each vehicle's features and extent of wear and tear to help you decide which is best for you. 

Buying a car is a significant expense for most people, and it’s important not to get carried away or persuaded by lower prices or discounts. Do the research and thoroughly check car prices and how much you can realistically afford to spend. If you’re getting a car loan, you can use RateCity’s online car loan calculator to check your monthly repayments and how they fit into your budget to avoid spending more than you can afford to.