What are pre-registered cars?

What is a pre-registered car? Everything you need to know before buying one

James Mills
Jul 2, 2019

Ever heard a friend boasting about what a great deal they got when buying a pre-registered car? Perhaps you’ve seen adverts for discounted pre-registered models? In either case, it’s likely that talk of saving thousands of pounds got your interest – after all, who doesn’t like bagging a bargain and bragging about it to anyone that’ll listen?

But what is a pre-registered car? Can anyone buy one? Are they widely available at short notice, and are the savings really as substantial as people claim they are? Or might there be pitfalls that preclude ordering one over a new car that’s tailored to your personal specification as it is assembled along the factory floor?

This helpful guide sets out to explain the pros and cons of buying a pre-registered car.

Pre-reg car deals

What is a pre-registered car?

Pre-registered cars are first ordered and owned by a car dealer, broker or leasing company. That dealer’s details will appear on the vehicle’s log book, or V5C, so that when a customer buys it, they will appear as the second owner, making it appear to be a used car.

Dealers buy them before customers because the car industry awards financial incentives to partners that buy in a certain volume of stock. These incentives are used to ensure vehicle manufacturers and national distributors sell the cars that are planned for annual or quarterly production targets.

The cars will then be held in stock, and most won’t be driven. So they should have precious few miles on them and won’t have been used for customer test drives.

What happens to pre-registered cars?

There are rules around the pre-registered cars. These rules dictate that the dealerships have to hang on to them for a defined period of time. After that, they can sell them. Because of this delay, they must be classified as used cars, meaning they’re sold at discounted prices.

They shouldn’t be more than six months old or have more than 200 miles on the clock.

What sort of discounts come with pre-registered cars?

Discounts can be anywhere between 5-25%. On a family SUV, like a Nissan Qashqai, that could mean a reduction of more than £6000.

The sum of the discount depends on how keen the dealer is to sell the vehicle, which is generally affected by the duration that the car has been sitting around.

The longer pre-registered car have been in stock, the keener sales people will be to move them on and recover the dealership’s funds.

New car deals vs pre-registered

Don’t assume that the pre-registered route is the best way to secure a big discount on a new car.

There are some impressive incentive packages being offered on bespoke-order new cars, which can be backed by the vehicle manufacturer – especially around finance, complimentary servicing or trim upgrades.

Are pre-registered cars the same as demonstrators or ex-demo cars?

It is known for pre-registered cars to be used as a demonstrator or courtesy car, but that will change its status.

You can tell the difference by the mileage. A genuine pre-registered car will have only covered a handful of miles, maybe as few as 20, at the most 200.

A demonstrator or courtesy car may have covered thousands of miles.

Additionally, demonstrators will have spent time with other customers, meaning they won’t feel brand new. Whereas a pre-registered model should come across as brand new. The dealer is obliged to declare the status and history of the car to the buyer.

What are the disadvantages of a pre-registered car?

It goes without saying, you can’t be fussy about the colour, engine, gearbox and options fitted to the car, because you can only choose from what’s for sale.

Whereas when ordering a new car, you can play to your heart’s content with an online configurator and then order it to your exact specification.

It’s worth repeating that this is effectively a second-hand car. That means yours won’t be the first name on its registration document so when you come to sell it, the new buyer will be the car’s third owner, which is likely to knock the car’s value.

Knowing how attractive cheap pre-registered cars are, the dealership may not offer such competitive finance deals as they would with brand new vehicles.

A further consideration is the impact on the warranty. The manufacturer warranty will have begun the day the vehicle was first registered – not with you, but the dealer. Given that a pre-registered car could be up to six months old, that means you may lose out on a significant period of cover. Try haggling over this point, or see if the dealer will put additional cover in place.

It also pays to be mindful of the impact on insurance. Some insurers will replace brand new cars with like-for-like models for a period of time, but not with a pre-registered car because it is considered second-hand. This is where it could be wise to use a GAP insurance product to cover the shortfall between motor insurance pay out and the price of an equivalent replacement vehicle.

And finally, make sure you get all the paperwork from the selling dealer. In particular, insist on having the section of the V5C logbook titled ‘New keeper supplement’ and a sales receipt.

            
                      

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