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

Herald Sun - Motoring - - Cover Story - neil.dowling@cars­guide.com.au

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.’’

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