If you’re in the market for a new or demo vehicle you’ll know that everyone has their own opinion on whether you should buy directly from the Original Equipment Manufacturer (OEM), or look for deals at independent dealerships. We’ve laid out the pros and cons of both to help make the decision easier
Estimated reading time: 5 minutes, 43 seconds
Vehicle buyers are faced with seemingly endless options ranging from new, demo and pre-owned vehicles, to where they choose to purchase it and exactly how they decide to finance their vehicle.
The bigger your budget the more options you have, but even a relatively small budget will come up with many options after a quick online search. Customers looking for a good deal can quickly go down a rabbit hole of ‘brilliant offers’ and ‘this week only’ specials that all claim to offer the best value for money.
But how do you know where to start? Our advice is:
- decide on your budget
- and the type of vehicle you’re looking for.
This will narrow down your search and likely leave you with a selection of choices at OEM (brand) dealerships and independent dealerships, all with varying pricing, mileage and finance options.
Before you jump in and test drive all 75 vehicles now left on your list (this could take a while), consider where you want to buy: directly from the OEM, or from an independent dealership? As an OEM, Suzuki will always advise buying directly from the manufacturer, but the truth is that there are some fantastic independent dealerships that offer legitimately good deals.
Demo vehicles
If your budget is tight, you will probably be looking at pre-owned and demo vehicles. Demo (demonstrator) vehicles are sought-after as they tend to have low mileage (often less than 20 000 km) with years still to go on their warranties. This means you get an almost-new vehicle for significantly less than the ‘new’ price tag, which is appealing.
If you purchase a demo vehicle from an OEM dealership they will be able to tell you what type of demonstration the vehicle was used for. Some may have been used for marketing events or as test drive vehicles at dealerships. Others may have served as rental vehicles, company vehicles or loan vehicles to customers.
While the mileage may be low, the risk with a demo vehicle is that it was probably driven by many different people under a variety of circumstances. Just because the mileage is low doesn’t mean it’s been driven with care.
When you buy a demo vehicle from a non-OEM dealer you add further risk as there is no guarantee that you’ll get an accurate record of any previous damage or repairs. There’s also no guarantee that original parts were used. This means you could be purchasing a ‘nearly new’ demo vehicle that has suffered significant damage that can cause endless problems in the long run.
When you purchase a demo vehicle from an OEM dealership they will know the vehicle’s history and be able to tell you if the demo vehicle was involved in any accidents or required any repairs. It also means any repairs were done by qualified OEM technicians using original OEM parts. The demo vehicle will likely still be under the OEM warranty, which means you will receive after sales support directly from the manufacturer. This significantly lowers the risk of ‘hidden’ problems as it’s in the dealership’s best interest to ensure the vehicle is in top condition.
Long term support for demo / used vehicles
The best advice is to always keep the ‘accountability trail’ in mind. In other words, if something goes wrong with your vehicle a week, month or year after purchase, will you have to figure it out on your own, or will you have some form of after-sales support?
When you purchase a demo / used vehicle from an OEM, you should expect:
- A full ownership and service history
- A guarantee that only approved parts have been used for any repairs or replacements
- An existing OEM warranty, or the option to acquire an extended OEM warranty
- Stability: even if your specific dealership moves or closes down, the manufacturer retains responsibility for your vehicle warranty and any after-sales service you require. It may be done through a different dealership, but everything else remains in place.
- Measurable service standards: all manufacturers require their dealerships to maintain certain service standards. Customers who receive inferior service are able to go directly to the manufacturer for assistance.
When you purchase a demo / used vehicle from a non-OEM dealer, you should expect:
- An uncertain ownership and service history as they are unlikely to have full electronic records.
- No guarantee that only approved parts have been used
- There may be an existing OEM warranty if the vehicle is still within the original warranty period. In this case, the dealer should be able to get a full service record. Some customers sell their car to a non-OEM dealer while there is still a year or more left on the original OEM warranty. Essentially you can find vehicles at non-OEM dealers that still have their OEM warranty in place. That sometimes makes it easier to get a service history from the OEM
- A variety of extended warranty choices where it’s up to the buyer to research and ensure they opt for the best product. However, if you're not extending through the OEM, you need to do a lot of research to make sure you're getting the right extended warranty.
- Higher risk: when you buy from a non-OEM dealership there is no guarantee of after sales support should you need it down the road.
- Uncertain service standards: most non-OEM dealerships are independent businesses and are not required to maintain any kind of after sales service standards. This means that once you’ve paid for the vehicle, you’re on your own.
Brand accountability
The ‘accountability trail’ mentioned above is not only about paperwork and service histories, it’s also about brand reputation.
When you purchase from an OEM dealership you are purchasing one of their products: you are buying into their brand. Just like every other business, vehicle manufacturers want their customers to be happy as this leads to more business and shines a positive light on their brand.
When you purchase from a non-OEM dealership you are simply buying the vehicle. It rarely reflects poorly on them if the vehicle has problems later on, because they didn’t build the car.
In fact, it’s human nature to blame the vehicle brand for anything that goes wrong, even if the problems occur as a result of poor, non-OEM approved parts and service. This means non-OEM dealers don’t have the same level of accountability when selling a vehicle as any concerns rarely reflect back on their business, but rather on the vehicle manufacturer itself.
Conclusion
Most vehicle buyers are looking for a brilliant deal, and it’s very tempting to opt for the lowest purchase price. Just don’t become so fixated on the purchase price that you forget a vehicle is a long-term purchase.
You’re not only buying a vehicle for today - you’re buying it for future road trips, holidays, work commutes and school runs. Taking the time to make sure you’re buying from a reputable dealer and will have after-sales support when you need it is the most important part when choosing your new car.
Subscribe to our blog for more insights like this, delivered straight to your inbox!
