Drive a hard bargain
The latest models at used-car prices? They’re out there, as long as you know where and how to look
THERE is a new way to bag a bargain. Buying a nearly new car that already has rego plates but has never been garaged outside a dealership can save thousands.
You might have to compromise on colour and equipment, and the warranty clock will be running, but it is one of the smartest ways to save on a new-car purchase.
‘‘ There are literally thousands of cars available around Australia. They’ve been registered but never sold to a retail customer,’’ says one of Australia’s biggest dealers.
‘‘ If a buyer isn’t fussy and they want to get a real bargain, it’s a great way to buy.’’
Many of the prestige brands have been boosting their sales for years with what some dealers call ‘‘ ghosts’’— cars that have been registered but not sold— to satisfy company targets or cash in on incentive programs run by the manufacturers.
Now, with Australian sales racing towards a potential record this year, the number of dealer-stock bargains has grown massively— and customers are exploiting it.
Doing a good deal is not rocket science— all it takes is a keen eye, knowledge of your target car and ambivalence about such matters as colour, trim and even location.
These cars are typically current models, mostly less than three months old and with no more than 5000km on the clock. They can be dealer demonstrators or cars used by service personnel, business directors and sales staff.
Many are listed on carsguide.com.au.
‘‘ It’s an opportunity for new-car customers to save some money. One of the savings is a reduction in stamp duty if the car is aged less than 60 days,’’ says dealer boss Tony Salerno.
Stamp duty costs are tricky, as the amount depends on factors including the purchase price, accessories fitted and even which state you live in.
‘‘ Every case is different but savings are there,’’ says Salerno, West Australian general manager of giant dealer group Automotive Holdings Group.
‘‘ The more expensive the car, the higher the stamp duty and so the higher the savings to the buyer.’’
There are various causes of the proliferation of near-new cars. Demonstrator cars can be registered by a dealership, usually with some sort of subsidy from the manufacturer.
In some cases, where stock of particular models is hard to get— for example, following the Japanese tsunami and Thai floods— a dealer might add an example to the fleet so buyers can get a taste before committing to a long wait on delivery.
But the savings might not be massive.
‘‘ Perception is greater than reality,’’ says Ford dealer Henry Brown.
‘‘ A decade or more ago, buyers would expect a demonstrator or dealer fleet vehicle to be $8000-$10,000 less than the new retail price.
‘‘ But that’s not the case any more.’’
The margins on showroom floors in 2012 are tighter than ever before because of competition among the 50-plus brands on sale in Australia. Then there is the continual downward pressure from new arrivals and the extra equipment now fitted in everything from the bargain basement though to the luxury levels.
‘‘ You can see that by the fact that cars cost today roughly what they did 20 years ago, yet equipment levels and safety features are far better,’’ Brown says.
‘‘ That’s not to say there aren’t savings to be had— merely that they’re not as big as history once told us.’’
For example, Holden ran a sales program in January to clear its backlog of 2011-build Commodores. But the difference in the price, compared with a 2012-build Commodore, was as little as $500.
There are greater margins on costlier cars, and many dealers prefer to register top-end demonstrators with lots of equipment because such examples make the best impression with shoppers.
Brown says his business has a couple of dozen demonstrators and many are better-equipped models that reflect the aspirations of buyers. They are also easier to sell when it’s time to clear the decks.
‘‘ The market for an entrylevel car as a demonstrator hasn’t the strength of a wellequipped model,’’ he says.
‘‘ Those base models are aimed mainly at fleets or commercial buyers and they tend to buy new through a leasing firm.’’
Looking at the bottom line, the Sydney car buying service company Private Fleet says buyers must consider a nearnew demonstrator as being a used car.
‘‘ Buyers must compare the price against a brand-new one and make an informed decision,’’ says director David Lye. ‘‘ Though a demonstrator may have only 2000km on the clock, and look as good as new, remember the average test drive is about 10 kilometres max, which means 200 people have probably put this car through its paces, giving it a real workout.
‘‘ Combine this with a model built the previous year and a compromise or two, such as a less-attractive colour, and suddenly the deal may not seem as rosy as first thought.’’