Delve drive be­fore you

The Courier-Mail - Motoring - - Cover Story - JOSHUA DOWL­ING NA­TIONAL MO­TOR­ING ED­I­TOR

WANT to save thou­sands by buy­ing a “demon­stra­tor” new car? It pays to shop around and ask some key ques­tions to make sure you’re not pay­ing over the odds.

The term “demon­stra­tor” is now used to de­scribe dif­fer­ent types of new or near-new cars. Most demo deals are stacked in the buyer’s favour — but some are not.

His­tor­i­cally, the term was used to de­scribe a near-new ve­hi­cle driven by dealer staff for a few months and used by cus­tomers to test drive around the block.

In most cases it’s part of a dealer’s con­tract with the man­u­fac­turer to run a min­i­mum fleet of de­mon­stra­tors with a va­ri­ety of pop­u­lar mod­els.

The man­u­fac­turer gives deal­ers a spe­cific “bonus” or con­tri­bu­tion to run each demo ve­hi­cle, usu­ally $350-$1500 on cars priced be­tween $15,000 and $50,000.

A hatch­back priced at $20,000-$25,000 usu­ally has a demo bonus of $600 to $750, al­though these fig­ures vary by brand and are a guide only.

The best time to buy a gen­uine dealer demo is when the car is near­ing the end of its two or three-month run.

Most deal­ers keep a car for at least 45 days to se­cure the demo bonus but they want to clear it within 60 days or so, to en­sure it’s still sold with plenty of reg­is­tra­tion and war­ranty cov­er­age.

Deal­ers cus­tom­ar­ily want to “flip” demo mod­els reg­u­larly, which means there are al­most al­ways some in stock — al­though not al­ways on ev­ery model.

What makes them good buys is the deal­ers’ prac­tice of writ­ing down the cost of the car each month.

For ex­am­ple, a Toy­ota Corolla that’s al­ready on spe­cial at $23,990 drive-away (about $3000 off the full RRP) might be let go for $21,990 drive-away when it gets to two to three months old. That brings the to­tal sav­ing to $5000 off the full RRP and $2000 off the al­ready dis­counted price.

In this ex­am­ple the dealer is tear­ing up money be­yond the “bonus” paid by the man­u­fac­turer.

Deal­ers view this as a cost of do­ing business and the deals vary de­pend­ing on how des­per­ate they are to move metal. In most states, a car is no longer re­garded as a demon­stra­tor once it has more than 5000km on the odome­ter, which is an­other in­cen­tive for deal­ers — more than this and it is re­garded as a used car.

But now a new type of demon­stra­tor model is in­creas­ing in pop­u­lar­ity. The term has broad­ened to in­clude new cars that have not been driven or reg­is­tered.

The sav­ings can be mas­sive and you’re still get­ting a brand- new car. You need to ask some im­por­tant ques­tions to en­sure you’re not be­ing short-changed.

First, some back­ground. As man­u­fac­tur­ers rou­tinely chase sales tar­gets, the more des­per­ate they are to in­crease monthly, quar­terly and end of year bonuses to deal­ers. In some cases the cash in­cen­tives are of­fered in the fi­nal days of the month.

To get an ex­tra, say, $2000 off a $30,000 car, the dealer must agree to take a large

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