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Guide to Buying an Ex-Demo Car

Understand the intricacies of buying an ex-demo car and how they compare to new and used options.
Published on December 3rd, 2020
  Written by 
Adrian Edlington
Adrian Edlington is PR & Communications Manager at Savvy. With a keen interest in personal finance, car loans, the mortgage industry, cost of living pressures, electric vehicles and renewable technology, Adrian's research includes conducting primary data surveys and analysis of up-to-the-minute secondary Australian data sources. His work on behalf of Savvy has been featured on ABC.net.au The Conversation, the Sydney Morning Herald, AFR, News.com.au, The Age, Herald Sun, Adelaide Now, SBS On The Money, 7News, Car Expert, Which Car, Drive.com.au and more. In his spare time, Adrian enjoys mountain biking and business podcasts.
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   Reviewed by 
Bill Tsouvalas

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Bill Tsouvalas
Bill Tsouvalas is the managing director and a key company spokesperson at Savvy. As a personal finance expert, he often shares his insights on a range of topics, being featured on leading news outlets including News Corp publications such as the Daily Telegraph and Herald Sun, Fairfax Media publications such as the Australian Financial Review, the Seven Network and more. Bill has over 15 years of experience working in the finance industry and founded Savvy in 2010 with a vision to provide affordable and accessible finance options to all Australians. He has built Savvy from a small asset finance brokerage into a financial comparison website which now attracts close to 2 million Aussies per year and was included in the BRW’s Fast 100 in 2015 as one of the fastest-growing companies in the country. He’s passionate about helping Australians make financially savvy decisions and reviews content across the brand to ensure its accuracy. You can follow Bill on LinkedIn.
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If you’re on the hunt for a car you may have considered new and used options – but what about an ex-demo model? These cars can strike a balance between the benefits of a new car and the potential savings of a used one. But what exactly are ex-demo cars and is it worth buying one? Let's delve into the world of ex-demo cars to uncover the benefits they could offer and considerations to keep in mind.

What are ex-demo cars?

Ex-demo or demonstrator cars are vehicles that have been used by dealerships for various purposes, primarily:

  • Displaying on the showroom floor: these cars showcase the model's features and aesthetics to potential buyers.
  • Providing test drives: customers can experience the car's performance and handling firsthand.
  • Loaned to media for reviews: journalists may use these cars for evaluation and writing reviews.

While they may have some mileage on the odometer, ex-demos are technically still considered new vehicles because they have never been sold or registered to an individual owner. Once their promotional use is complete, dealerships often sell these cars at discounted prices, making them an attractive option for budget-conscious buyers. In fact, 22% of Australians would consider buying an ex-demo model when shopping for their next car.

Tips for buying an ex-demo car

If you decide an ex-demo car aligns with your needs and budget, here are some ways to ensure a smooth and fair purchasing experience:

  • Buy from a reputable dealer: purchasing from a reputable dealership can provide added assurance regarding the car's condition and history. Look for dealerships with a strong reputation for transparency, customer service and quality vehicles.
  • Pick your moment: while there's no guaranteed “best time” to buy a demo car in Australia, there are periods that tend to offer better chances of securing a good deal. Generally, this will be two to three months after the launch, when dealerships are clearing space for newer models. You may also be able to find a good deal during end-of-financial-year (EOFY) sales.
  • Conduct a thorough inspection: don't rely solely on the dealership's assessment. Take the car for a test drive and have a trusted mechanic inspect it for any potential issues.
  • Research the car's history: obtain as much information as possible about the car's history, including its usage during its time as a demo vehicle. This can help you understand how the car has been treated and maintained, providing valuable insights into its overall condition.
  • Compare prices: research the market value of the specific ex-demo car you're interested in to ensure you're getting a fair deal. Consider factors such as mileage, condition and included features when comparing prices.
  • Negotiate the price: ex-demo cars often have some negotiation leeway, so try to get the best possible price. Salespeople and dealerships often have sales targets so might be more motivated to offer deeper discounts on demo cars to meet their quotas.
  • Get everything in writing: ensure all the agreed-upon terms, including the warranty details and final price, are clearly outlined in the purchase agreement.

The potential benefits of buying an ex-demo car

There are a number of advantages to buying an ex-demo car. Here's a breakdown of some potential benefits:

  • Significant cost savings: the most obvious advantage of buying an ex-demo car is the potential for substantial savings compared to purchasing a brand-new vehicle – often several of thousands off the recommended retail price. The lower price tag allows you to access a higher tier car that might have been out of reach otherwise.
  • Newer model year: you can often find ex-demo cars from the current or previous model year, offering access to the latest features and technology.
  • Well-maintained: dealerships generally maintain ex-demo cars in good condition. They undergo regular inspections and maintenance to ensure they remain in top condition for test drives and promotional events. As a result, buyers can often find ex-demo cars that are still in excellent shape with minimal wear and tear.
  • Negotiation potential: since ex-demo cars have already been registered, there may be room for negotiation on the final price, especially compared to brand-new models.
  • Warranty benefits: in many cases, ex-demo cars still carry the manufacturer's warranty.  This provides buyers with added peace of mind, knowing that they are covered for certain repairs and defects within the warranty period.
  • Immediate availability: unlike ordering a new car, which may involve waiting weeks or even months for delivery, ex-demo cars are typically available for immediate purchase. This can be advantageous for buyers who need a vehicle sooner rather than later.

Considerations before buying an ex-demo car

While the potential savings are enticing, it's vital to approach the purchase of an ex-demo car with caution. Here are some key factors to consider:

  • Mileage and wear and tear: while the mileage is typically low, it's crucial to thoroughly inspect the car for any signs of wear and tear, both inside and out. Pay attention to the interior for potential signs of excessive wear, like scuffs on leather seats or worn carpeting.
  • Service history: while dealerships typically maintain ex-demo cars to high standards, there may be some uncertainty regarding how the vehicle was treated during its time as a demo model. Request the car's complete service history from the dealership to ensure it has been maintained according to the manufacturer's recommendations and have it inspected by a mechanic.
  • Warranty coverage: verify the remaining warranty coverage and understand any exclusions or limitations that might apply to ex-demo vehicles. Coverage may be shorter than what you would receive with a brand-new vehicle and certain components of the car may have experienced accelerated wear, potentially reducing their coverage under the warranty.
  • Limited choice: ex-demo cars are typically sold ‘as-is’ and choice and customisation option are typically limited. This means you may not find the model or the exact colour, trim level or features you desire.

Should I choose an ex-demo or used car?

Both ex-demos and used cars can be cost-effective alternatives to new cars. When it comes to choosing between them, the best choice ultimately depends on your individual priorities. Used cars may offer:

  • Wider selection: the used car market boasts a vast array of options. This allows you to explore a wider range of models, features and colours, increasing the chances of finding the perfect car that aligns with your specific needs.
  • Potentially lower price: used cars can range in price and can be significantly cheaper than both new and ex-demo cars. This wider price range allows you to find a car that fits comfortably within your budget, potentially offering significant savings compared to other options. 
  • Potential for negotiation: especially with private sellers, you may be able to negotiate a discount on the advertised price. This allows you to potentially secure an even better deal if you're comfortable negotiating and have researched the market value of the specific car you're interested in. 

However, it’s important to keep in mind potential drawbacks of used cars, such as:

  • Varying age and mileage: used cars can span a wide range of ages and accumulated kilometres, translating to a greater potential for wear and tear and higher maintenance costs.
  • Condition: used cars come in varying conditions depending on their previous ownership and usage. They should be thoroughly inspected by a trusted mechanic before purchase. 
  • Limited or no warranty: used cars, especially those purchased from private sellers, typically come with limited or no warranty. This means you'll shoulder the financial burden of any repairs or replacements that might arise after purchase. While some dealerships might offer warranties on used cars, they are often limited in scope.

 

Ex-demo cars offer a unique opportunity for Australian car buyers to access significant savings on well-maintained, near-new vehicles. Ultimately, the decision to buy an ex-demo car should be based on your individual circumstances and priorities. By conducting thorough research and understanding the potential risks and rewards, you could find a car that delivers both financial benefits and a satisfying driving experience.

If you’re in the market for a new, used or ex-demo car, you can turn to Savvy to get you finance sorted. Our hands-on team will compare quotes from dozens of lenders to help find a car loan that suits your needs and budget. Get started with Savvy today!

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