What does pre-registered mean?

A pre-registered car means as the new owner you will be the second name on the registration certificate. Our guide explains when this can benefit you and potential drawbacks you should be aware of.

What Pre-Registered Means

A car will be classed as pre-registered if it is purchased by a dealership, leasing company or broker and registered to themselves before being sold or leased to a customer. The reason for doing this is to take advantage of offers from manufacturers or to boost sales for that month. Pre-registered cars are likely to be vehicles known to be popular, in the most sought after colours and trim levels. As these cars are now registered, getting these sold will be high a high priority, which can lead to financial benefits for the customer.

Benefits of a Pre-Registered Car

The main benefit is saving money. Whether this is in the form of a reduced monthly rental for those who are leasing, or saving on the purchase price, you will be paying less for a pre-registered car. As the car already has one registered owner it is a second-hand vehicle even if it has only ever sat on a forecourt. So you will be able to get what is still really a brand new car for closer to a used car price.

As the car is built and ready to go, delivery times should be fast so there will be less waiting around until your new car is on your driveway.

Drawbacks of a Pre-Registered Car

Before you consider a pre-registered car you should be aware of the following;

• A pre-registered car may not have the most recent number plate, as it may have been registered over 6 months before being sold. If having the newest plate on the road is important to you, then a pre-registered car may not be for you.

• There will be no customisation options available to you. If you are very clear about the options you would like on your car, then it may be difficult to find a pre-registered car that ticks all the boxes. These cars have already been made so what you see is what you get.

• You will be the second owner. If you are purchasing a pre-registered car you will be the second keeper on the V5 registration form. When it comes to reselling the vehicle, this could affect the value as it will no longer be a ‘one-owner’ car. If you are leasing the vehicle and intend to return it at the end of your contract this will make no difference to you as the finance company will always be the legal owner of the car and you will never need to resell it yourself.

• Servicing and Warranty may be affected. These are important to consider for both those purchasing a pre-registered vehicle and those who are leasing a pre-registered vehicle. If you are buying a pre-registered car then you should be aware that the Warranty began when the car was first registered, meaning you will not have your full 3 years manufacturer warranty when you buy the car. It also means the first MOT will be due 3 years from the date of registration, which will be less than 3 years from the date you purchased the vehicle, and if servicing is determined on time elapsed, this will be earlier than the 12 months you may have been expecting. However, with a 24-month contract, you are unlikely to be affected by this.

• There are some Insurance considerations. If you have a like-for-like insurance clause, this means a car written off or stolen within the first year from registration it will be replaced by a new one. If you are the second owner of a vehicle, your like-for-like policy may no longer apply. In this case, you may want to consider other options such as GAP insurance to make sure you are protected from a total loss.