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Are dealer demo cars a good idea to buy

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If you are in the market for a new car, you may opt to consider a dealer demonstrator model that comes with all the bells and whistles of a new arrival (including that new car smell), just with a couple of hundred kilometres under the tyres.

What is a dealer demonstrator or ‘demo’ car?

Dealer demonstrator or demo cars are vehicles that have been used by a dealership for test drive or demonstration purposes, meaning they are not brand new. In most cases, these cars will often have a couple of hundred kilometres clocked on the odometer which will often result in them being sold for a slight discount.

In most states across Australia, the demo tag does not apply to cars with more than 5,000 kilometers on the odometer, with vehicles of this nature instead classified as used cars.

Types of demo car

There are generally four main types of dealer demo cars available. These include:

  • Dealer demos: Cars used by dealerships for test drives or promotions.
  • Runout models: Cars dealerships look to offload quickly to make room for the next model.
  • Courtesy demo cars: Cars loaned to customers who bring their other vehicles in to the dealership for servicing.
  • Factory demos: Cars used by the manufacturer at exhibitions, events or in commercials.

When is the best time to purchase a demo car?

Demo models of a particular make and model are generally readily available as soon as they hit the dealership floor. This is because showroom staff are encouraged to drive these cars to develop an understanding of the products they are actually selling. However, this does not mean you should hunt for a demo model immediately following the launch of a new car. Instead, it is best practice to bide your time and wait a few months, given most dealerships look to clear new car models within 60 days. This is to replenish stock supplies and boost sales figures with manufacturers.

Demo car pros and cons


  • Cheaper than buying ‘brand new’: Demo cars will generally sell at a discount, generally a few thousand dollars off the recommended retail price of a new model. Dealerships who may have a greater level of demo stock could look to discount cars further as dealership run out stock.
  • Good condition: Demo cars are generally in good condition as they are well looked after by the dealership. Demo models can often be top of the range vehicles, given the dealership wants to advertise the features available for those purchasing a top of the range model.
  • No wait times: Demo cars have no wait times for delivery, as they are in stock with the dealership and ready to find new homes immediately.


  • Limited choice: It’s a matter of what you see is what you get with demo cars. Generally the dealership will only have one, or at best case, two demo cars available of the model you are looking at purchasing. If you are not too fond of the colour, the trim or the features offered compared to others, its a case of bad luck.
  • Wear and tear: A number of drivers may have put a demo model through the wringer before you, the question is you don’t exactly know how many or for how long. The dealership is required by law to undertake any repairs and inform you of such if problems have occurred prior to your purchase.
  • Tyres: As with wear and tear, given the uncertainty in terms of number of drivers, length of drives and the weather conditions faced, the tyres on a demo model may require replacing sooner rather than later if they were on a brand new model.

If you are looking to purchase a new car, check out loans.com.au range of competitive car loans available for new and demo models or chat to one of our lending specialists today.

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About the article

As Australia's leading online lender, loans.com.au has been helping people into their dream homes and cars for more than 10 years. Our content is written and reviewed by experienced financial experts. The information we provide is general in nature and does not take into account your personal objectives or needs. If you'd like to chat to one of our lending specialists about a home or car loan, contact us on Live Chat or by calling 13 10 90.

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