While looking for a new vehicle, many drivers rush towards the latest models on the lot. On the other hand, many drivers also prefer to browse through lightly used cars.
Both new and used vehicles come with their fair share of positive and negative aspects. However, they aren't the only options — drivers can get the best of both worlds by buying a demo car from one of their local dealerships.
Today's article will answer the question "what is a demo car?", address the various pros and cons of purchasing one, and more.
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What is a demo car?
In short, a demo car is a model that has been "demoed" or previously driven by a dealership employee for a short period (generally a few months).
After the time elapses, the employee switches the demo for a new model. The demo car is then sold to a customer, generally at a discount.
What's the difference between a demo car and a car on the lot?
There's practically no difference between a demo car and a brand-new car.
The only difference is that one has been sitting in a dealership lot for a period of time, while the other has been used by a responsible driver. Because of this, demo cars will have more kilometres than brand-new cars.
Buying a demo car Canada — what are the pros and cons drivers should be aware of?
Just like new and used vehicles, demo cars come with their fair share of pros and cons.
Drivers should take the time to learn about the various pros and cons that come with buying a demo car before committing to a final decision.
Buying a demo car pros and cons
The pros and cons of demo vehicles are:
Pro — Lower price point
One of the obvious benefits of purchasing a demo car is that they are generally cheaper than their brand-new counterparts.
As mentioned earlier, car dealerships generally offer demo cars at a discount. The discount level depends on a number of variables, including the condition and the amount of time the model was "demoed".
Similarly, demo vehicles are generally less expensive due to the fact that they have depreciated in value.
As you may know, a brand-new vehicle loses a portion of its value as soon as it is driven out of the parking lot. When the dealership employee returns their previously brand-new demo car, it no longer has the same value as an unused model.
Drivers get to take advantage of vehicle depreciation when they purchase a demo car, allowing them to potentially save thousands of dollars upfront.
Pro — Condition of the vehicle
In order to attract potential buyers and retain the vehicle value, dealership employees need to be extremely careful with their demos.
As mentioned above, the price of a demo car is partially based on its condition. So, dealership employees need to do everything that they can to keep the car in good shape. Because of this, it's quite rare for a demo vehicle to have physical damage like scratches, scuffs or dents.
If a demo vehicle happens to have one of the issues listed above, then the dealer will likely sell it at an even greater discount.
All in all, drivers that want a car in good condition can save some cash by buying a well maintained demo car. In contrast, drivers that don't mind a few dings and dents can save even more by purchasing a demo car with minor physical damage.
Pro — Additional features
It's not uncommon for demo cars to have additional entertainment or safety features like backup cameras, lane correction systems and Bluetooth connectivity.
Not only do drivers get to enjoy these innovative features, but they can also potentially help them save on car insurance.
Many Canadian car insurance companies offer various discounts to drivers who own a vehicle with safety technology. This is because this technology can help them avoid accidents, thus making them less of a risk on the road.
If you've recently purchased a demo car with safety features, be sure to reach out to your Surex insurance advisor to learn more about the discounts you may be eligible for.
Con — Technically not a "brand-new" vehicle
Many people need to save for years before being able to purchase a brand-new car.
Although demo cars are cheaper than unused models, buying one defeats the purpose if you specifically want a brand-new vehicle. Some drivers see this as a downside to purchasing demo cars.
Con — May need to negotiate for the best deal
Some dealers expect buyers to negotiate for the best price for a demo car. While some drivers see haggling for a bargain as an enjoyable challenge, not everyone feels comfortable negotiating for such a big-ticket item.
Commonly asked questions about insuring demo cars in Canada
Here are some frequently asked questions about insuring demo cars in Canada:
Do you need to buy car insurance for a demo car?
Yes! Drivers are legally required to have a satisfactory level of car insurance in order to operate a vehicle on Canadian roadways, whether their vehicle was purchased new, used or as a demo.
How much does insurance coverage cost for a demo vehicle in Canada?
Unfortunately, we can't give you an exact number. This is due to the fact that car insurance companies assess a variety of factors while determining the price of coverage. However, we can say that having certain safety features can potentially help you save on car insurance in Canada.
Where can you find car insurance for demo vehicles in Canada?
You've already found the perfect place to start looking! Our team of Surex insurance advisors (our preferred term for brokers) can supply drivers with several high-quality car insurance quotes in ten minutes or less!
Call or click today to learn how you can save up to 25% when you bundle your policies with one of our providers.
Is buying a demo car a good idea for drivers in Canada?
At the end of the day, the answer to this question depends on your personal wants and needs. If you're looking for a way to save money on your next car, a demo model may be a worthwhile option.
On the other hand, if you're particularly keen on being the first owner of a vehicle, we suggest looking at unused models.
