Up to 20% of new cars are pre-registered by dealers
A BBC investigation has found an increase in the practice, which can provide big discounts for customers but skew sales figures
As many as one in five new cars are being pre-registered by dealers in order to meet manufacturers’ sales targets – a practice that could be skewing overall sales figures and confusing customers.
An investigation by BBC Radio 4’s You and Yours programme found that many dealers are increasingly buying and registering surplus stock cars under their business name, and then selling them on to customers at a discount of up to 20%.
Dealers told the BBC that the process – which is legal – is often the only way to hit sales targets set by manufacturers. Failure to hit the targets can affect bonus payments from the car maker, but the investigation found that pre-registering can create a dependency, as it makes it harder to sell new cars.
There are fears that while customers can benefit from cheaper prices, many do not understand the process and how it affects buyer protection, such as manufacturer warranty periods.
However, Tamzen Isacsson of the Society of Motor Manufacturers and Traders (SMMT) told the BBC that the process was driven by natural business demand and consumer choice, and was a normal part of a functioning car market.
“Self-registration allows dealers to manage their stock,” she said. “It enables consumers who don’t want to wait months for a new car to be able to access one immediately and with a very low mileage.”
Industry analysts CAP HPI said that the number of pre-registrations was growing and could be as much as 100,000 cars per month. This could skew the message to be taken from new car sales figures, as although the cars have been registered, they are not on the road. The number of pre-registered cars is not recorded by the motor trade or government, and the SMMT records them as fleet sales.
How cars are sold can impact the motor industry in a variety of ways. Earlier this year, it was revealed that the rising number of cars being sold on Personal Contract Purchase (PCP) arrangements was leading to increasing devaluation of certain used models.