Are you looking to get the very best deal on a car? If so, you may have considered buying a ‘pre-registered’ car. But what does that actually mean? Well, in this guide we will go over exactly that, plus why dealerships pre-register cars and what the main differences are between them and normal cars on the forecourt.
What are Pre-Registered Cars?
A pre-registered car is when the dealer registers the car to themselves. When a car is registered it becomes a used car, even if it has never moved from the moment it landed at the dealership or even if it is still at the factory compound! When a dealer pre-registers a car they are effectively buying it from the manufacturer themselves. A dealer will register the car to themselves prior to it being sold on the forecourt.
Why do dealers do this? Well, it is mainly because dealers are given sales targets by the manufacturer and they can achieve these targets by buying the car themselves. The bonuses that dealers receive from car makers are significant which means they can pass on these savings to buyers.
Why do cars get Pre-Registered?
Cars get pre-registered because sometimes it can be financially beneficial to do so. Profit margins on new cars can be small. The Daily Telegraph reports that “It doesn’t matter that the dealership has registered the car to itself, that car will have paid its way. The dealer can then sell it as a low mileage ‘demonstrator’ and they won’t be too fussed if they have to discount it heavily to shift it on because it’s already done its job.” A pre-registered car will typically have very low mileage. Most often they will have ‘delivery miles’ on the clock – up to 200 at the most.
It’s all about dealerships meeting sales targets, even if they have to buy the car themselves and shift it on with a bunch of discounts! The bonus payments dealers receive from manufacturers can be worth enough money that they are prepared to register the cars to themselves, and then sell them off to end-users (customers like you and I) as pre-registered models.
When do cars usually get Pre-Registered?
Cars will usually get pre-registered twice a year, in March and September when the new registration plates come in. This means that most new car sales are made within these months, but they also have the highest targets for sales.
If a dealer or group isn’t going to hit its targets and trigger the bonuses through normal sales, it can often make a lot of sense to register some cars to hit the targets and worry about selling them later.
What is the difference between Pre-Registered and Demonstration cars?
Almost every used car buyer will know at least a little about ex-demonstrators. They're the cars the dealers use for test driving customers who are interested in their new cars, right? Well, not necessarily. Although the vast majority will be used for test drives, many of them will also be the company cars of dealership staff and even sometimes their family members.
If you see used cars that are the current registration and they only have delivery miles on the clock, you're probably looking at pre-registered cars. These vehicles are to all intents and purposed brand new, but technically speaking, they are still considered used even though they've never been driven and used by anyone.
Pros of Pre-Registered cars:
- A dealer cannot sell a pre-reg car as a brand-new one, which means it is going to be cheaper to buy.
- You’re getting what to all intents and purposes is a new car, but for the price of a used one.
- A pre-registered car is certainly better than buying a demonstrator that really is a used car.
- The mileage of the car will be pretty much nothing!
Cons of Pre-Registered cars:
- You are buying a used car and that has repercussions for the eventual resale value when it’s time to change it.
- If you are financing the car, you also need to be aware that the car finance deal will reflect the fact that it isn’t new. If you are buying on a PCP or balloon HP, the deferred payment will be lower than it would be if you had bought new and that could result in higher monthly payments.
- When buying a pre-registered car you may also not get the exact model, colour or specification that you want.
- You should also establish how long the car has been at the dealer. The car’s warranty begins the moment they are first registered so you may not get much of a warranty time!
Best time to buy a Pre-Registered car?
Dealers will have the most stock during the plate changes in March and September, so your choice and chances of getting a great deal are heightened at the beginning of these months. Otherwise, look to buy at the end of the month or financial quarter, as the dealer will be under pressure to hit its monthly targets.
Posted 26/05/2021 Back to Blog