A former loaner is a late-model car a dealership lent to its service customers while their own cars were in the shop, and now sells. It usually has a few thousand miles and costs less than the same car new.
Because customers drove it, it is a used car under the Federal Trade Commission's Used Car Rule, even if it has never been titled to an owner. That changes how it is priced, financed, and warranted, so here is what to know. A former demonstrator, a car the dealership used for test drives or its staff drove, is a used car for the same reason.
The FTC's Used Car Rule defines a used vehicle as any vehicle driven more than the limited use needed to move or road-test a new one before it is delivered (16 CFR 455.1). A loaner has been driven by customers, so it is sold as used, with the FTC Buyers Guide on the window, even though it may never have had a retail owner.
| New | Former loaner | |
|---|---|---|
| Miles | Delivery miles | Usually a few thousand |
| Price | Starts from the sticker | Usually below new, reflecting the miles and time in service |
| Factory warranty | Starts the day you take delivery | Often started the day the car went into loaner service, so less is left |
| Loan rates | New-car rates | Often used-car rates, which run higher, though some brands support loaners |
| Window sticker | The new-car sticker | The FTC Buyers Guide, plus the original sticker if the dealership has it |
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Used. Under the FTC's Used Car Rule, a vehicle driven more than the limited use needed to move or road-test it before delivery is a used vehicle, and a loaner has been driven by service customers.
It can be: a late-model car with low miles, usually maintained by the dealership, for less than new. Weigh the discount against the warranty already used and the loan rate, which may be a used-car rate.
Usually, but it often started the day the car went into loaner service, not the day you buy it. Ask for the in-service date to see how much is left.
Sometimes. Some brands' leasing companies lease late-model loaners and demonstrators; many do not. Ask the dealership.