Ex-demo cars – can you save more?

Written by 
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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, updated on November 25th, 2021       

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If you’re in the market for a new car but love a good bargain too, looking at ex-demonstrator (ex-demo) cars is a tried and true option. Ex-demo cars differ from brand new cars in one critical way – dealers have let prospective buyers test-drive the car, used it as a loan car, or driven it themselves.

Dealers sell cars as “ex-demo” when they’re over three months old and have fewer than 5,000km on the odometer. So what are the benefits of buying ex-demo cars? What must you sacrifice?

The big draw – savings galore

Ex-demo cars main attraction is the savings and ofcourse, lower car loan repayments if you are financing it. Not just because they will have a slightly lower list price, but owe much to a pre-payment of on-road costs by the dealer. Dealers must register the car if they want to use it on the road. There is also a potential reduction in stamp duty if the car is fewer than 60 days old, though this does change depending on where you live and fitting of accessories, etc.

Though the market for ex-demos has changed over the last couple of decades, dealers are conscious about demonstrating top-spec models over bare-bones entry level equivalents. This means weighing up potential savings in a more expensive demo relative to a much cheaper car, dollar for dollar.

Since they have already been running for a while, the dealer and test-drivers have already run in your ex-demo car. An added bonus is the higher resale value compared to a brand new car, which can lose up to 20% of its value once you drive it home.

The turn offs

With ex-demos, what you see is what you get. There’s no chance to pick your colour, customise features such as trim or sports packs, or opt for sedan over a hatchback or vice versa.

If you buy an ex-demo well into its life cycle, which means you’re inheriting a new car warranty at that point. Buying an ex-demo six months into a one year warranty (though uncommon as they are) effectively gives you a six month warranty.

Most drivers of ex-demos have only taken short, 10km maximum trips – if 200 people drove the car, how many rode it hard enough to cause serious wear and tear? It’s something you must be conscious of.

At the end of the day, the savings might just not cut it relative to the sacrifices. If you can find the car of your dreams for $5,000 less than the list price, it’s a steal. Going in with a mind for compromise and savings will do you better than expecting the earth.

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