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Demo car buying guide and checklist

How to score a bargain without getting blindsided.

It’s important that you come prepared when you enter the car-buying process. If you’re looking for a discount and considering the purchase of a demo car, you’ve came to the right place.

How to buy a demo vehicle in 6 steps

Follow these steps to make sure you’re actually getting a fair deal on your demo car.

Step 1: Research the car’s history

Make sure you’re actually getting a demo car by asking the salesperson about how the car was used. You can verify this by doing a quick search of the car’s Vehicle Identification Number (VIN). A VIN check gives you information about the odometer reading, maintenance and repairs, structural damage and more.

You can do this either online for a small fee or through a used car lot. Ask about anything in the history that doesn’t line up with what the salesperson told you.

Step 2: Check the car’s warranty

Also request proof of the car’s in-service date — the day that the warranty begins. Sometimes warranties begin earlier on demo cars, since dealerships are technically using them before making a sale. If the warranty starts early and there isn’t an option to extend it, you can use this as leverage to ask for a lower buying price.

Step 3: Do it again with more demo cars

The best way to find a good deal is to compare multiple options — especially from other dealerships. Compare the asking price, financing options and history of different cars before coming up with a short list of potential cars.

Step 4: Find out how much your options are actually worth

Once you’ve narrowed down your choices, do a quick search online to find out how much the car should be going for in your area. You can check the typical price for the car you’re looking for on sites like Edmunds and Kelley Blue Book.

Step 5: Inspect for damages

Dealerships typically use demo cars for test drives, which can lead to damages. When you’ve found the car you’re thinking of buying, check it yourself or have it inspected by a third-party expert for any possible damages. If you find damages that are manageable, use this as leverage to negotiate down the price.

Step 6: Negotiate the price and financing

Since demo cars fall somewhere between used and new, you might have more wiggle room than you think with the price and financing. Use the research and inspections to work down the price with your dealership. You might also be able to get a better deal on financing by getting preapproved for a car loan from a third-party lender.

Where can I find a demo vehicle?

The car dealership is where you should head to find a demo vehicle. Check prices on sites like Kelley Blue Book and Edmunds to get an idea of current market prices. These comparisons can give you bargaining power when it comes to negotiating the vehicle price.

Find loans to buy a demo car

Name Product Filter Values Minimum credit score APR Loan term Requirements
LightStream Auto Loans
Good to excellent credit
2 to 7 years
Must have a good to excellent credit profile, be a US citizen or a permanent resident with a valid green card, have a valid Social Security number, credit card verification requested upon loan approval and have a valid US address.
Quick car loans from $5,000 to $100,000 with competitive rates for borrowers with strong credit.
Varies depending on the lender
3 to 6 years
Varies depending on the lender
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CarsDirect auto loans
No minimum credit score
Varies by network lender
Must provide proof of income, proof of residence, and proof of insurance.
Save time and effort with this lending service specializing in beginner-friendly or subprime car loan.
No minimum credit score
3.9% to 27.9%
1 to 6 years
18+ years old, annual income of $4,000+, no active bankruptcies
Get pre-qualified for used car financing and receive competitive, personalized rates.

Types of demo cars

Before you figure out your finances and run to pick up a demo vehicle, make sure you understand what you’re buying:

  • Older models. These are discounted cars that need to be cleared out before new stock arrives. The vehicles usually have less than 5,000 miles and can come with discounts for the light wear and tear.
  • Dealer demos. These cars are sometimes used as loaners for customers and they’re usually the newest models to help promote them. These can also be vehicles that were immediately returned by customers or even cars that’ve been canceled customer orders.
  • Factory demonstrators. These vehicles are used at promotional or sponsored events and are sent back to the dealership to sell for a bargain price.

What’s a demo car?

Also called a demonstrator vehicle, this is a car that sales people and executives use at dealerships for personal use or test drives. The can have thousands of miles on them, but are typically in great shape. These are new model cars that usually come with all the bells and whistles from top-range models. And because they aren’t technically “new” — you can save on your purchase.

How much do demo cars cost?

Pricing a demo car can be tricky. It can vary, depending on the model, make and vehicle — as well as any damages and the number of miles it’s been driven. Typically they cost less than a new car but more than a used car.

How to price a demo car

You can do this by following these steps:

  1. Research the price of a new car. Look at cars with the same model and make on sites like Edmunds or Kelley Blue Book.
  2. Include deals. Deduct any popular rebates and other buyer incentives like 0% APR financing from the price of the new car.
  3. Compensate for mileage. Deduct around 20 cents per mile on the odometer.
  4. Factor in any damages. If the car has had any repairs or paint jobs, you can often use that to lower the price of your vehicle.

Should I buy a demo car?

Demo cars can help you save but it’s not always a great choice. Here’s when you might and might not to buy a demo car:

Consider a demo car if…

  • You want to limit depreciation. Since demo cars have already been used, you won’t pay as much — and therefore won’t lose as much money when you drive it off the lot.
  • You’d rather have an unregistered car. Demo cars aren’t registered, meaning that you will be considered the first owner when you buy it.
  • You’re ready to negotiate. Demo cars require some

Look elsewhere if…

  • You want a deal and don’t mind buying used. Used cars typically cost less than even demo cars — and could depreciate at a slower rate.
  • You notice some wear and tear. That demo might be even less valuable than a used car.
  • You don’t want to negotiate. Demo car prices aren’t as fixed as new or used cars — meaning you might have to negotiate

How much can I save with a demo vehicle?

Discount on each demo car can vary based on its features, what it was used for and how many miles it has. 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 compare your options before jumping in the driver’s seat.

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4 tips for making your demo car purchase

  • Ask questions. Find out how old the car is and how often the car was used. Ask if there is any documentation available to see how the car was used.
  • Negotiate. Always negotiate the price of a demo car — you’ll be surprised how much of a discount you could get.
  • Don’t rely on dealership appraisals. Get the car inspected by a third-party to feel confident the car is still in top condition.
  • Get preapproved. Apply for a pre-approved car loan to give yourself a hard budget and more bargaining strength.

How to inspect a demo vehicle

Demo vehicles are relatively new, but some may have been driven off road or have more miles on them. Inspecting the vehicle for any signs of wear and tear is important prior to making your purchase.

  • Listen for to the engine for any strange noises.
  • Check the quality of the tires.
  • Ask if the vehicle has been in any accidents.
  • Look for scratches and check the paint quality.
  • Check the battery life.
  • Check the lights, radio, windscreen wipers and that everything functions properly.

If you’re unsure of what to look for, take the vehicle to a mechanic or bring a friend who is car-savvy.


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Frequently asked questions

Image source: Shutterstock

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