Demo car pricing - negotiating


#1

Yesterday my husband and I reached an agreement to buy a “new” but actually demo 2014 Mitsubishi Outlander SE AWD. We have not signed any paperwork yet but I did put a small deposit on my credit card. We said we’d come back today to finalize the deal and then take the Outlander. It has about 4500 miles.

I have done a lot of research on the Outlander and the other vehicles we were considering and felt pretty confident about what we are doing. Now though, however, after reading more about demo vehicles, I’m wondering if the deal we reached is not as good as I originally thought. One thing I had not researched was the new/demo labels.

We live in Kansas and from what I’ve read, it’s not even legal to sell this vehicle as “new” even though the dealer says it is new, “but a demo” - they did not hide the demo label from us - actually promoted it as a way we could get a better deal. It is listed on the dealer website as new. I’m a bit confused how they can blatantly claim both labels.

If I price a “used” Outlander with the same options, it seems the agreed price is $1200 to $2700 over the “used” value if sold by a dealer - the range comes from the variations between different websites.

At this point I am thinking we should say we are not moving forward unless they further discount the price. Since the car was presented as new and we haven’t signed any formal paperwork, I don’t feel we are obligated and should have no trouble getting our deposit back. I would be disappointed to miss out on this Outlander as it is not easy to find exactly what we want but I also don’t want to pay too much.

Any advice/thoughts?


#2

Not many dealers use “demo” cars any more. Most of the time, they let the customer select the car they want and take that car out for a test drive. If they like it, they buy it. It is not uncommon for most new cars to have 30+ miles on it when sold.

In most states, a car is “new” if it has never been registered before. A dealer can use a new car as a perk for top salesmen to drive during the year, never register it and then sell it as a new car or “demo”.

You should look up the KBB vale of this vehicle as a used car and use that as your basic for your offer. If compared to that value, you get a good deal, then I see no reason not to go for it. If the dealer is only offering something like $500 below invoice, that is the typical deal for a brand new vehicle. They make up the difference of the invoice with that “doc fee”. Their profit is in the hold backs they get from the manufacturer and in financing and upsells (added warranties, etc.)


#3

It is a used car and still protected by warranty up to the mileage/ time requirements. These are typically 3 years or 36,000 miles. If it was not registered before, you will have the full 3 years. Check the CarFax report to verify it was never registered. The salesman will use words like new, but any car with more than about 400 miles is a used car.


#4

In addition to the good advice provided so far, something else for the OP to consider is whether he actually wants a Mitsubishi in the first place. At this point, Mitsu dealerships are rapidly disappearing, as the company has very few models to sell, and their dismal sales figures in the US put them in the classic position of having one foot in the grave and the other foot on a banana peel–so to speak.

When Suzuki’s operations in The US went belly-up, the resale value of their cars took a major hit, and many automotive journalists have speculated that Mitsubishi will follow Suzuki into oblivion in The US.


#5

A very good point was just made and I agree with @VDCdriver‌

From what I understand, the Outlander is pretty much Mitsubishi’s last hope, as far as the US market goes

On a positive note, from what I hear, Mitsubishi put a good effort into the vehicle


#6

Thanks for the suggestions.

On VDCdriver’s question and db4690’s response - yes, we realize Mitsu may have a questionable future in the US although we tend to keep our vehicles a VERY long time so resale not a big factor for us - and we really like that the Outlander fits other criteria we are seeking - good MPG, 7 passenger seating, nice features, for an overall good price.

A question I’m not sure of though - if Mitsu does leave the US market, what happens to our warranty? It is a very good warranty - 60/60,000 bumper to bumper 10/100,000 power train which is also a nice feature.

Appreciate any other advice as we are calling the dealership soon…


#7

While technically it’s still a new car because it has never been sold or titled, the 4500 miles means it should be priced as if it were a used car…As VCD pointed out, if Mitsubishi folds, the value of the vehicle will take a big hit as it becomes an orphan and any needed warranty service becomes difficult or impossible…If you still want it, don’t let the dealer detect that, and after asking about getting your deposit back, see if they come back with a slightly better offer. At that point, make your considerably lower offer and see how they respond…


#8

Yep new equals never titled, not never driven. Agree with others but ever talked to anyone who thinks they paid too much. Everyone gets a good deal.


#9

Thanks again for comments. Talked to salesman and told him that we have concerns as the vehicle really isn’t new and should be priced as a used car. He said he’d have the manager call me tomorrow and he understands if we need to find another vehicle - essentially saying that they won’t go lower on price but wouldn’t try to hold us to the deal. We do have an advantage that we really don’t need this car - we like it but not the end of the world if it doesn’t work out. We’ll see…


#10

Dealer demonstrators are considered to be used cars. Their warranty period starts on the day the vehicle was put into service. In this case, the warranty started on the day the dealer assigned a “Demo” label to it. This in turn means the factory warranty is shortened a bit. The Feds say so too… :slight_smile:

As others have mentioned, that Mitsubishi name would make me very hesitant considering the marketplace situation they’re in.

If they decide to pull up stakes and call it quits that could mean the end of any warranty service, fixes for Recalls, and very limited to no availability of any dealer only parts.


#11

The vehicle was never titled therefore it is a new car

IMOO I would not buy this car with someone else’s money. Mitsubishi is a huge company but chooses to put little money or quality into the vehicles.

NEEDLESS INFO…I needed to inspect some wrecked vehicles at the Normal IL plant where MIT builds cars and was told as soon as the rumor got out that MITS was circling the drain reps from Toyota, VW and others showed up ready to move in. It is supposedly a very nice factory.


#12

Respectfully, I reiterate that titled or not, a dealer demonstrator is considered a used car. That’s what I’ve been told by dealers I worked for, by factory reps, and on the dealer demo that I was allowed to use.

Here’s a cut and paste from the Federal Trade Commission…

Previously titled or not, any vehicle driven for purposes other than moving or test driving, is considered a used vehicle, including light-duty vans, light-duty trucks, demonstrators, and program cars that meet the following specifications:

a gross vehicle weight rating (GVWR) of less than 8,500 pounds;
a curb weight of less than 6,000 pounds; and
a frontal area of less than 46 square feet.

#13

#14

Luciaroo, let the Dealership make the next move…I think you will get a phone call in a day or two…


#15

@luciaroo:

yes, we realize Mitsu may have a questionable future in the US although we tend to keep
our vehicles a VERY long time so resale not a big factor for us

Will you be able to get Mitsubishi parts and service for that “VERY long time”?


#16

Talk to a Saturn or Daewoo owner about what happens when the dealership shuts down…


#17

Some may remember back in the late 80s when Daihatsu entered the U.S. market with the Charade, an aptly named automobile. Five years and gone…you’re on your own.


#18

We are still on the fence - not sure if we want to move forward but the dealer is just barely budging on price/terms. We might be willing to risk the Mistu longevity issue - but at this point, that is definitely a major concern. On the plus side, I have read that Mitsu sales have increased quite a bit lately. My husband’s car is a Saab and of course they are no longer around - but so far, can still get parts. It is frustrating because of all the cars we have researched and test drove, the Outlander does stand out to us for what we are seeking. Despite some questioning quality, we found it to be quite impressive. If we do get the car and the warranty ends up useless, that would of course be hugely disappointing - if the dealer would drop the price we would be more willing to take that risk.


#19

A Toyota dealer should have parts for a Daihatsu, or T least should be able to get them with the least amount of trouble.


#20

I remember going to a Honda dealer once to get an Acura part because they were closer. Said no can do, Acura parts are separate. Got it at the Acura dealer and the part was marked Honda. Same thing with Ford and Lincoln. Couldn’t go to a Ford dealer for my Lincoln part but had to go to a Lincoln dealer for an additional mark-up. Maybe if you know the part number and the folks are in a good mood.