Pros and Cons of Buying a Used Demo Car

Demo cars are used on car lots to showcase various makes and models to potential buyers. They are put on display for clients to look inside and take on test drives. Once these cars hit the market they are a decent way to score a deal, but they do carry unique risks.

Demo cars are often cheaper than brand-new ones but are not completely unused. For those looking to save money on the cost of a used car, opting for a demo car could be a smart financial decision. We’ll review the pros and cons of buying a used demo car.

How Demo Cars Enter the Market

Demo cars usually enter the market once a brand-new model of a car is launched. When this happens dealers will want to replace the previous demo car for a newer model. A few months after a new model is launched is normally a good time to buy a demo car with the best deal. Demo cars can be advertised as ex-display models, ex-demonstration cars or demonstrator cars.

Are Demo Cars Considered New or Used?

Demo cars are not considered new because they have been driven and have accumulated mileage during test drives. That said, the mileage is typically much lower than most used cars.

How Are Demo Cars Typically Used? Who Uses Them?

Demo cars are mostly used for test drives by potential customers at dealerships. They are also sometimes used by sales teams and brand executives for short periods so that they get a feel of the car they are selling.

Pros and Cons

Benefits of Buying a Demo Car

There are often many positives to buying a demo car:

• Price: Demo cars are often considerably cheaper than new cars, in a nearly new condition. This means you could secure a near-new car at a used car price.
• Mileage: The mileage on demo cars is often lower than most used cars, meaning they are likely to perform better for longer.
• Well-maintained: Display cars are usually well cared for to attract potential buyers so used demo cars are usually in very good condition. They tend to be serviced and cleaned regularly to maintain their appeal.
• Advanced features: Dealers often use demo cars with accessories and advanced features to help boost sales. These are often missing from basic models. Choosing an ex-demo car could mean that you secure all of these features for a lower price.
• Warranty: As demo cars are displayed in short rotations, they are often within manufacturer warranty when they are sold.
• Peace of mind: Demo cars have been previously driven by dealers and can sometimes give peace of mind that the car is performing well at the time of purchase.
• Single owner: Demos cars are only ever owned by the dealership, meaning it is easier to track the car’s history.

Cons of Purchasing a Former Demo Car

While there are many benefits to buying a demo car, it's also important to be aware of the risks:

• Wear and tear: While demo cars are often well-cared for, they would have had several people taking them for a test drive. Be sure to look it over for cosmetic issues.
• Warranty: The warranty would have started when it was first registered at the dealership, meaning that there is less time on it than if you were to buy a new car.
• Less variety: There are fewer used demo cars than used cars in general. There is likely only one demo car for a particular model, meaning less choice in terms of features, fuel type and color.
• Mileage: Demo cars have higher mileage than brand-new cars.
• Less negotiation: Demo cars are normally discounted on the original new car purchase price, meaning it can be difficult to negotiate the price down further.
• Limited records: As demo cars are often only ever owned by the dealer, there are fewer used-car records to verify the car’s actual history and condition.
• Unclear condition: It often happens that demo cars have been used more extensively than the dealer has advertised, and this can be hard to verify.

As with buying any car, used demo cars also need to be thoroughly checked over. Even though it was looked after by a dealership, it may have still experienced a few bad drivers on test drives.

When looking to buy a demo car, ensure to take a used car checklist with you to make routine checks on brakes, engines and tires. It’s also a good idea to have a mechanic look it over before making a decision.

Where Can You Find Demo Cars for Sale?

Used demo cars are usually sold directly from the dealerships that used them as a demo car in their showroom. You can also find demo cars for sale on the websites of official brands and manufacturers, online car marketplaces, online and physical car auctions, and via social media.

How Much Should a Demo Car Be Discounted?

Discounts on demo cars can vary wildly. Normally, a reduction of between 15%-25% is acceptable, reflecting the depreciation value of a car’s first year of use. This can result in a discount that can sometimes be several thousands of dollars.

Some dealerships offer reductions based on mileage or per month the car was used. It can be difficult to ascertain the true market value of a used demo car as there is very little transaction data for them. Some have recommended that you deduct 20 cents for every mile the car has been driven from a comparably equipped car of the same make, model and style.

Demo cars can be a good option for buying a nearly new car at a used car price. Ex-demo cars often have low mileage, are well-maintained and have added accessories. That said, there is often less variety, discounts can be low and their true history can be unclear.

As with buying any used car, we recommended to have a used demo car checked over by a mechanic before choosing to purchase.