Car Buying

Here's why you should pick a demo car over a new one at the dealership

By: Vin Heney on December 6, 2018

Last month, I bought a brand new car. Well, not exactly a brand new car, but not quite a used car either.

I bought a demo.

A demo is a new vehicle that senior salespeople and management at dealerships get to drive for a year or so. It allows them to get familiar with the product, and it’s an enviable perk of the job. When they’re done demo-ing the car, they sell it through their dealership as a ‘new’ car, but at a significant discount — because while it’s never been sold, it has been driven. Demos can be good options for people looking to buy a new model vehicle but who want to avoid the steep depreciation that’s waiting for them upon purchase.

We’d been in the market for a car for a while. Our 12-year-old car was getting costly to maintain and a bit too unreliable for a young family. As much as we would’ve loved a brand new whip, we simply couldn’t justify the price. So we looked at gently used options instead, cars with 50,000 kilometres or less of usage. I figured a reliable brand — we considered Volkswagen, Honda and Toyota — with relatively little wear and tear would hit the sweet spot.

I was also looking to get something back for my old car, but didn’t have the time or patience to sell privately — despite hearing that you can get more back through sites like AutoTrader.ca or CarGurus. I didn’t care. I wanted the selling, buying and paperwork all done in one shot, so I began looking online at the used inventory of dealerships.

When I saw a discounted, fully loaded 2017 Jetta with only 12,000 kilometres, I thought: Why would someone trade their car in after only 12,000 kilometres? Why the discount? There must be something wrong with it.

I was wrong.

Here’s why buying a demo car turned out to be a good option for my family, and why I’d recommend it to anyone in a similar situation, and what to expect when you buy one.

Demos offer great value

Demos are gently used by staff, but never sold. They usually have anywhere between 8,000 and 12,000 kilometres on them when they get put up for sale, so a sizeable amount gets knocked off the sticker price. In the case of our car, approximately $6,000 was knocked off right away. And because dealerships are eager to sell their demos, buyers are in a good position to negotiate. But remember, demos are already discounted, so the room for bargaining often comes in the form of trade-in value or having “extras” like a spare set of tires thrown in.

But that’s not the only financial advantage of buying a demo.

“When you buy a demo, in addition to the sticker price reduction, you don’t pay for freight and PDI [pre-delivery inspection],” says Marcelo Andrade, new car sales consultant at Yorkdale Volkswagen. “So right off the bat, you’re saving another $1,600 to $2,000. And because demos are technically new, you’re still eligible for any new car incentives that are in place, like financing, cash incentives, or lower leasing rates.”

Expect some add-ons

Demos are often fully loaded, because hey — what employee wouldn’t want to demo the highest trim? So don’t be surprised to find things like the latest safety tech, premium digital features, leather seats and sunroofs. Demos also often come equipped with add-ons like tinted windows and winter floor mats; otherwise expensive options that get thrown in. (Oh, and don’t forget to tell your insurance broker about the safety features — they may help lower your premium.)

Warranty intact

Demos are still relatively new when they’re sold, so the eventual owners are entitled to the majority of the factory-issued warranty. In the case of our Jetta, it had been on the road for 10 months and 12,000 kilometres. This means that roughly three years and 68,000 kilometres of the four-year, 80,000 kilometre bumper-to-bumper warranty is intact. So we’ll still enjoy those first few years of worry-free driving, but at a much lower cost.

Treated like new

Employees who get to drive demos must comply to some pretty strict rules. Things like pets and smoking are a big no-no. So if you see any issues with the car — scratches in the paint, problems with the interior, etc. —  speak up before purchasing. Dealerships will usually fix those on their own dime. And remember, demos are not the same as loaners, so they should never have been driven by the public. Always ask who drove the demo before buying and always ask for the CarProof report to make sure it’s been properly maintained and is in excellent condition.

“When you buy a demo, you need to check the condition, the history and the number of drivers. You have to ask questions,” says Andrade. “But all in all, it’s a great idea to buy a demo.”

 

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