You are looking for a deal on your next new car and you visit the dealership and discover that they have several dealer demo cars that have been marked down below regular price, but what is the story behind these cars? Commonly called “Demos” are new cars that have or are being driven by a car dealership’s managers or sales people that are still technically new cars. These are not used cars, but instead are called demonstrators.
Dealer Demo or Used Car
The use of a new car is a perk of employment that is provided by many, but not all dealerships for their managers and salespeople. A dealer demo car is not a used car, but technically a new car. A new car does not become a used car until it has been registered and titled in a state. Once a new car has been licensed, titled and registered with the state the “statement of origin” (original title) is turned into a title, which is a sure sign that the car is used.
However when it comes to demo cars, dealers and certain employees can drive a new car and put several thousand miles on a vehicle before it must be titled. Therefore the dealer demo cars are regularly put on the lot and offered at a reduced price to entice buyers to buy these technically new cars. Some car buyers that are not concerned about buying a new car with a few thousand miles on the odometer if they feel they are getting a good deal. However that is not always the case when it comes to buying a car that was a demonstrator.
Care and Conditions for Dealer Demo Cars
When it comes to providing a demo car for employees dealerships are usually particular about who gets to drive one of these vehicles. First of all the car dealer’s insurance carrier must assure that these drivers are good or at least acceptable and safe drivers without habitual accidents or excessive driving violations. Once the insurance approves them the person driving the demo is completely responsible for keeping the vehicle in like new condition. This means that the vehicle needs to be kept clean, free of scratches, dents, dings or damage of any kind.
If there is any damage to the dealer demo car whatsoever the employee driving the vehicle will be responsible financially for restoring the vehicle to new condition. If the vehicle was in an accident that caused damage the dealer must disclose the repairs to anyone that buys a demo car along with he details of repair. Dealerships are very particular about how their demos are treated because they will have to sell these cars. Most dealers inspect all of their demo vehicles on a regular basis to assure proper care and treatment.
Getting a Deal on Dealer Demo Cars
I have been asked many times if it’s truly possible to get a good deal on a demo car. My answer is yes and no because there are many variables that come into play if you are going to buy dealer demo cars. People will often come into the dealership and ask if there are any demos available because they assume they will be a great deal without negotiation, but this is not always the case. Dealer demos car are usually priced close to dealer cost, but not below because they will usually sell sooner or later, but net everyone is up to buying a demo car. However is a demo car has been sitting on the lot too long the dealer will often lower the price below their true cost. I have seen dealers sell demo cars for a thousand or more dollars under their actual cost, that’s right they lose money on the sale, but they consider that part of doing business.
Pros and Cons of Buying Dealer Demo Cars
Pros of Demos:
Typically substantial price reduction without negotiation
New bugs worked out if any in first few thousand miles
No new car smell (not everyone likes the smell)
Still eligible for new car incentives and financing specials
Cons of Demos:
Several thousand miles on your new car
Warranty coverage is not extended for miles used
New car smell is gone
Often you can get a new car for the same price as a demo car
Whether you should buy a dealer demo car is typically a personal decision. Some people are not concerned about a few thousand extra miles on their new car. However some people couldn’t even imagine buying a new car that had more than 10 miles on the odometer. This a decision you have to make, after all you are the one that has to pay for it and live with for several years.