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.
By The Broker Black · Published September 30, 2026
Why a loaner is a used car.
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.
How it differs from buying new.
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
What to check before you buy.
The warranty start date. Ask for the in-service date, and work out how much of the factory warranty is left.
The service history. A loaner is usually maintained by the dealership that owns it; ask for the records.
The condition. Check the seats, the wheels, and the cargo area; loaners are driven by many people.
The rate. Ask whether the brand or the dealership offers new-car or special rates on its loaners, since used-car rates cost more. Our car loan calculator shows both.
The discount against new. Compare the loaner's out-the-door price with the same car new, after any new-car incentives.
A former loaner, on your numbers.
Type your own numbers and see the same car priced as cash, as a loan, and as a lease, with the taxes and state fees for Arizona. Nothing you type leaves this page.
Cash
...
out the door
Sales tax
...
Title, registration, and fees
...
Trade-in
...
Due at the dealership
...
Finance
.../mo
Amount financed
...
Total interest
...
Payments plus cash down
...
Lease
.../mo
Due at signing
...
Total over the lease
...
Value at lease end
...
Lease or buy, over 36 months
You pay
You own at the end
Real cost
Lease
...
Nothing; you hand it back
...
Finance
...
Equity of ...
...
Cash
...
A car worth about ...
...
An estimate on the numbers you type, not an offer of credit or a quote from any dealership. Starting loan rates are the average new-car APR for each credit tier (used-car APR for a used car) from Experian's State of the Automotive Finance Market, second quarter 2026, VantageScore 4.0. The starting money factor, residual, and acquisition fee are starting figures only; the leasing company sets the real ones. Taxes and state fees are estimates for Arizona; the dealership's paperwork and your motor vehicle agency have the final numbers. What you own at the end assumes the car is worth the residual. Nothing you type is sent, saved, or used to check your credit.
Quick answers.
Is a loaner car new or used?
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.
Is a former loaner a good deal?
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.
Does a loaner car still have a factory warranty?
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.
Can I lease a former loaner?
Sometimes. Some brands' leasing companies lease late-model loaners and demonstrators; many do not. Ask the dealership.