You may or you may not have come across a demo car for sale at a dealership. A demo car can be defined as a vehicle that has been driven by customers, family members or employees of a dealership. Such cars usually have several miles on the odometer. However, they are not really considered as used cars. This is because their use was primarily short term and for tests.
These vehicles are considered as new (legally) since they were never sold. They also qualify for new car warranty, special financing and rebates. Demo cars are priced lower than their new counterparts. As a result they may seem to be a good choice when looking for a ‘new’ car. Even though this is the case, you still need to look out for a few things.
Even though demo cars are covered by the manufacturer’s warranty, you need to note that just like any other new car, the warranty begins at mileage 0. For instance, if the vehicle has a 36,000 mile/three year bumper to bumper warranty, and the demo car shows 10,000 miles on the odometer, then you will only be covered for the remaining 26,000 miles.
You may think that as long as you do not put a lot of miles on the car, you will still be covered for the duration of three years. Actually, this may also be a problem. Warranty coverage starts the moment a dealer determines an ‘in service’ date on the car. The dealer may already have put the car in service. If so, you need to find out when it was done and how much time you are left with. The date the service was started was when the warranty countdown began. If the dealer has used the demo car for six months, then this is the amount of warranty that you have already used up.
Wear and Tear
Majority of dealers use demo vehicles for their own use. However, some may loan the cars to service customers. When this happens, the demo vehicle may have been driven by tens or even hundreds of different people. Chances are not everyone who drove the car was careful with it. Ask the dealer how the car was used and how many people drove it. You can talk about price once you are comfortable with the vehicle’s warranty and history.
What should a demo vehicle cost you?
The best way to know how much you should pay is by knowing the cost of the car when it is new. In general, you will want a discount ranging from $.25 to $.40 per mile driven. On a car that has been driven for 10,000 miles, the discount will be between $2,500 and $4,000. Take note that such vehicles are not necessarily great deals. In fact majority of experts do not advise buying them.
In some cases, there are extra discounts offered by the manufacturer or dealer for demo cars. If you do not come across this, make sure you are keen on the history and warranty of the car before you decide to purchase it.