Looking to save on your next vehicle but worried about the reliability of used cars? A demo car might be your answer. A lesser known option for car buyers, demo vehicles come gently used and at a discounted price compared to brand new vehicles.
Landing a deal on a good-quality demo car can make you one lucky buyer, but it’s important that you come prepared with the right know-how to negotiate. If you’re looking for a discount and are considering buying a demo car or vehicle, you’ve come to the right place – we’ll tell you what you need to know about demos and how to get rolling in one faster.
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Also called a demonstrator vehicle, this is a car that executives, customers or sales people have driven for brief periods of time for personal use or simply to test drive. These cars have low mileage – often only a few thousand kilometres – and tend to be in great shape. Because demos have been used to make sales or to drive execs around in style, they may come with some nice upgraded features and add-ons.
Demos are considered “new” vehicles because they have never been sold or registered. Once a vehicle has been registered, it officially becomes “used.” But despite being new in status, demos are discounted to reflect their slight use and to get rid of them in order to make room for new demo vehicles.
There are many great advantages to buying a demo car, but there are some potential disadvantages as well that you may want to consider before making a purchase.
Car dealerships are where you should head to in order to find a demo car. Check prices on sites like the Canadian Black Book or autoTrader.ca to get an idea of current market prices. These comparisons can give you bargaining power when it comes to negotiating the vehicle price.
Before you figure out your finances and run to buy a demo car, make sure you understand what you’re buying:
Sometimes, car dealers try to pass off a used car as a demo car to make more money off of it or to make the car look more attractive to buyers so that it will sell faster. There’s nothing wrong with buying a used car, but a used car should be priced like a used car. Furthermore, if your dealer is trying to pawn off a used vehicles to you as a demo, he or she may be obscuring the vehicle’s true condition.
So how do you separate real demos from fakes? Ask how much the car has been used and by whom. If the owner of the dealership was driving the car, but then replaced it a few months later with the same type of car but customized with fancy upgrades or special rims, then the vehicle is not likely being sold because of overuse or hidden damage.
Similarly, if the dealership formerly used the car as a test vehicle, but then a new model of the vehicle rolled out and the dealership wanted to show that model to prospective customers, then it makes sense that they’d want to sell off the old demo. The lack of used vehicle records for demo cars can make identifying a fake demo a little challenging.
But by asking the right questions, test driving the car yourself and having a licensed mechanic from an outside shop look the vehicle over and give it a seal of approval, you should be able to avoid unknowingly driving off the lot in a lemon.
Demo cars can help you save but it’s not always a great choice. Here’s when you might buy a demo car and when you might not:
Demo vehicles are relatively new, but some may have been driven off-road or have more kilometres on them than usual. Inspecting the vehicle for any signs of wear and tear is important prior to making your purchase. Here’s what you should look out for:
If you’re unsure of what to look for, take the vehicle to a mechanic or bring a friend who is car-savvy to help you.
Discounts on demo cars can vary based on each car’s features, what it was used for and how many kilometres it has, but often you can get thousands of dollars knocked off the new car price right away.
Some dealerships offer a percentage discount on demo vehicles based on the MSRP (manufacturer’s suggested retail price) of new models. Such percentages may run around 15% – 25%, or the discount may be set to reflect the average depreciation of a car’s value over its first year of use. For a $30,000 vehicle, that could mean a discount of $4,500 – $7,500.
Alternatively, some dealers offer a flat percentage discount per month the car was used, often between 1% and 3%. Others offer a flat discount on the mileage. If this is the case, then look for a discount of at least $0.25 – $0.55 cents per kilometre that the car was driven. For cars driven 5,000 km, that would mean a savings of $1,250 – $2,750.
Many dealers are willing to waive freight expenses and other miscellaneous fees for demo cars, so be sure to ask your dealer about these types of discounts while negotiating the price.
Compare the new vehicle sticker price to see how much you’re saving with the demo vehicle. Demo cars can be a great option and help you save when purchasing your next vehicle, but they might not be the right choice for everyone, so be sure to look around and avoid making a hasty buying decision.
Need help paying for your next car? Find out about the best car loans in Canada here.
