Should I Buy a Dealer Demonstrator?
That demonstrator you’re thinking of buying? Is it a good way to get a cheap new car or a great way to to get one that’s been thrashed or crashed?
A ton of people e-mail in, asking me how to get a cheap demonstrator. They don’t want a new car - they want a demonstrator. The underlying premise is simple: Here’s the world’s easiest entry point for a cheap new car.
Unfortunately, this is not really how the world works.
A demonstrator is in fact not some de facto cheap new car. That suggestion is like the cover letter with a selfie from some purported Russian bride, by e-mail. It's easy to get seduced. Once you’ve transferred the $20,000 to Siberia for grandma’s unexpected lifesaving surgery, you’ll be standing there in the arrivals concourse with a dozen red roses until long after the last passenger has waltzed off Doom Air 253.
Face facts: Svetlana is not coming to the wedding, and a demonstrator’s just an expensive used car trying a bit too hard with the hair and makeup. Even worse, as a used car - which is really what this is, how can you tell it hasn't been crashed or thrashed? If you're thinking about asking the salesman, I admire your faith in human nature, but I really think you're being overly optimistic.
If you’re thinking about buying a demonstrator, here are the top three pitfalls you will need to sidestep.
HAS IT BEEN THRASHED?
Have you ever stopped to wonder about the brief previous life of a demonstrator? In one common scenario, demonstrators are the cars dealers put on, to get you infatuated. I get that - salesman in the passenger’s seat, a hot lap around the block, then grab your ankles - because it’s time to hum Moon River.
In another common scenario, the car was, up until recently, purportedly a senior executive’s car. Think about that: You’ll be buying a senior executive’s car. You’ll be able to tell the mother-in-law that at barbecues. (She’ll still think you’re a useless tool who’s not nearly good enough for Princess Leia - but at least you’ll be useless tool who doesn’t measure up, in a senior executive’s car. And that’s something.)
Those senior executives: conservatively planning world domination to please the boys upstairs. Heaven forbid that the whole 'senior executive car' premise could be a lie. That purported senior executive’s car could in fact be the great lemon to end all lemons: the former car company promotional vehicle. The automotive equivalent of the girl who just can’t say no. Fun for a week, locked in the presidential suite; but definitely not a keeper.
Take a look at all the car magazines, all the review websites - opposite lock, burnouts, hot laps - this is what promotional vehicles do. Being a motoring journalist is commonly like: What car will I abuse today? Car companies all maintain a fleet of promotional cars for media abuse. Correction: media evaluation. And if they could talk, the first thing they would request is asylum. Those 4WDs being driven along the beach, in the salt water, at 60 kilometres per hour, for the cameras: great fun … as long as you’re not the poor bastard who has to own it later.
All these cars get sold as demonstrators. Correction: Former ‘senior executive’ cars.
I think about some of the things I’ve done to cars that would soon thereafter become senior executive cars. Sometimes I think about the real people who bought those cars, with real money - their own money - and to this day they believe the only other arse imprinted in the driver’s seat was some CEO’s. It’s disgraceful. I should be ashamed. (I’m not, but I should be… And they say being a sociopath is a bad thing.)
I’m not accusing all car salesmen of lying over this. It’s probably only 99.99 per cent of salesmen who would bullshit you on this issue. There’s probably one misfit in every 10,000 who would try the truth. (There's always one bad apple.) Every time you hear ‘senior executive car’ - just imagine the things I might have done with your former senior executive car. To me, a media car is like getting a thrash metal band together with 10 groupies and a ziploc baggie full of coke. I’ll be on location for the next few days, honey. Hold my calls… (Admittedly for the vehicle it’s probably a bit more like a week at Gitmo, strung up in an orange jumpsuit, answering somewhat stern questions about Osama Bin Laden’s home address.)
These cars get abused. Respect is not part of the promotional (former senior executive) car lexicon. Abuse is not covered by warranty - regardless of whether you are the abuser or you just inherited said abuse. The brakes, clutches, tyres, drivelines and suspensions have all been to hell and most of the way back. They’re all shouting ‘get me out of here’. It’s just like an accelerated durability test - where you get to live with, and pay for, the consequences.
I’m really not sure any discount, no matter how monumental, makes a car like this good value.
HAS IT BEEN CRASHED?
Demonstrators get crashed. Often. It’s that simple. You do that kind of thing with a demonstrator, and on the balance of probabilities, you are going to crash. I once crashed a Honda NSX - a $250,000 supercar. That was 20 years ago. Brilliant. I mean, why crash a cheap car? Anyone can do that. That was an interesting telephone conversation with Honda’s PR...
You know what? That up-ended NSX became a former senior executive car too, I guess. After a great deal of reconstructive surgery. And intensive physiotherapy.
Demonstrators do it tough - even the ones that get off comparatively lightly and are actually only driven by prospective customers.
The point about this is: in all your fantasising about acquiring a cheap new car - correction: demonstrator - correction: former senior executive car - did you once countenance the remotest possibility that it might have been crashed and/or thrashed?
My strong advice is that, if the numbers add up and the deal is in fact unbeatable, un-pass-up-able, then you’ve got to treat it like buying a used car. Do some independent investigation. Get a mechanic - an independent one you trust, not the dealership’s service guy - to investigate the vehicle for both its mechanical health and wellbeing, and for evidence of crash repair. And if it fails either assessment, do not walk away. Run.
Now that should be enough. But there is a third serious impediment. Another speed hump on the road to parking a demonstrator in your garage: The discount is probably not enough. Let’s say you’ve got a car, the brand-spanking new drive-away price of which is $40,000. Same thing as a demonstrator might be on offer for $35,000. Five grand off; a 12.5 per cent saving. Where do I sign, right?
Wrong. Because $40,000 is the recommended drive-away price of the new car. You can probably get $4000 or $5000 off that without even trying. These things are designed to be discounted. But even if you only manage to talk it down by $2500, you’re still halfway to the price of that demonstrator - and no motoring journalist or ad agency stunt driver later to be broadly contextualised as a ‘senior executive’ has had his way with the new one. Guaranteed. If you want ‘abuse’, you’re going to have to do it yourself. Seems like pretty cheap insurance to me.
The other thing to remember in the pricing game is a psychological thing about spontaneous decision making called Thin Slicing. Google it. Or try this reference to the book Blink, by Malcolm Gladwell >> Thin slicing is where people make big decisions after focussing on only a little bit of information. Car salesmen all know this, instinctively. That car dealer is going to want you to focus on the awesome low price of that demonstrator. He wants you thin slicing on that like a fifteen-year-old.
That way, he can bend you over on the trade-in, the finance and the thousand other things they trot out to pump up the profits - like the fabric, paint and rust protection you don’t need, for $2000, and the extended warranty that’s really just a thinly veiled servicing contract. You’d get a better deal if you sidelined these tricks, organised your own finance, sold your old car independently and told them to bugger off on the useless protection and borderline-scam that is a dealership extended warranty. If you did all that, you’d be able to afford a new car that no senior executive - like me - has ever gone drifting in. And trust me, that’s a good thing.
If you're confused about DIY car finance, here's a basic background briefing on car finance types >>
One great way to talk down the price of any new car is to attack one of the biggest (and least justifiable) scams routinely trotted out by car salesmen across the board: The dealer delivery charge >>
Hit the red link below, and I’ll help you save thousands on any new vehicle. But not demonstrators (gotta have vestigial self-respect). Don’t forget to leave a comment below, and let me know what you think.