How to Buy a Demo Car

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When shopping for a new car, you can save hundreds or thousands of dollars by purchasing a dealer's demo car instead of one that has never left the showroom. These cars have the same factory warranty as the newly delivered ones on the lot. The dealer maintains these cars in pristine mechanical condition because they must perform as the representative of the nonrolling stock. Shop carefully and you may find one with loads of options that you might not be able to afford otherwise.

  • Narrow your car model selections to a few that interest you. Use Consumer Reports or Edmunds car reviews to identify reliable models. You may need to pay a nominal amount to purchase the "Consumer Reports" annual car-buying guide, but this is one instance where it is wise to spend money to save money.

  • Research the Manufacturers Suggested Retail Price (MSRP) for your target car models online or by reading newspaper advertisements. Compare the installed features and prices for standard and custom models, along with the cost of options.

  • Select a car dealership to visit. Make a few phone calls to find the showrooms with that the largest inventory selection.

  • Take time to look at the current model year's stock and review the available options. Make note of the difference between the MSRP and the dealer invoice amounts displayed on the models that interest you.

  • Request a test drive for a new vehicle in the model that you want. Ask the sales representative about the base price, dealer cost and value of the installed options on the demo car. Then compare them to those of the floor models.

  • Ask your sales rep about buying the vehicle that you took for a test drive if the price is attractive. Review the vehicle's service records and the CARFAX report before you decide to buy.

  • Negotiate the buying price. Deduct mileage at the standard 15-cent-per-mile rate that dealers use for excess mileage on leased vehicles, to arrive at the fair market value of the demo. Ask for extended warranty from the dealer to compensate for mileage on the demo car. Depending on the age of the demo car, manufacturer incentives may apply to your purchase.

Tips & Warnings

  • Visit more than one dealer showroom to compare the prices of similar demo cars. Timing is important. Look for inventory sales advertisements near the end of the current model year. Many dealerships will be more eager to move old stock and demos to make room.
  • Most states do not allow any car to be sold as new if it was ever titled to anyone other than the dealership Some demonstration cars have so many installed options that the price could still be higher than a similar new model with the most commonly requested options. You may get a better value from a certified pre-owned vehicle. Normal depreciation can reduce the original selling price as much as 37 percent, according to Consumer Reports.

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