It’s the end of a quarter and the car deals are out there and some are fantastic, even in new reg months like March and September.  But are all the deals as good as they look?

For instance, many cars are sold already registered.  There are good reasons for doing this such as being able to have popular models in stock instead of having to wait for 3 months or more for a built-to-order motor.  Also, it can be cost effective for the dealer to order extra cars if it means hitting a cumulative bonus from the manufacturer which in turn means they can pass on a discount to the customer.  So what’s not to like?

Well, pre-registered means the dealer has already registered the car and although it’s as new as any other, the buyer will show as the second owner.  This in turn affects the resale value further down the line as the more owners a car’s logbook shows it to have had, the lower its market value becomes.  So is it a good deal?  Yes, if the upfront discount outweighs the loss in value later on.  If you plan to keep the car for ten years then it probably makes sense as two owners over ten years is less than average but if you will have the vehicle for the average 3 or 4 years then it’s hard to know if the upfront discount is enough.

And therein lies the financial challenge; it’s hard to know if it’s going to work out a good deal or not as future resale values are future ie unknown.

Also the warranty period starts from date of registration not date of sale to the buyer so they will get shorter cover from defects which could be costly.  Some dealers have be known to hang on to the V5C logbook for the car for up to 6 months and there are negative legal implications to this as the owner of the car should have a logbook in their name.

But leasing rather than buying changes all that.  Many cars that are to be leased are in stock, pre-registered and discounted in the same way as they are for purchase.  The future value is also unknown but it’s the owner of the car, the leasing company, not the leasing customer that takes the risk.  The customer just pays a rental based partly on what the finance company predict it will be worth at the end.  If that prediction is wrong then it doesn’t affect the customer at all.  If the lease includes maintenance then all remedial work needed should be covered and you don’t need the logbook as you don’t own the car.

So pre-reg can work for buyers but it’s hard to quantify until the car is sold.  With leasing there’s an element of predictability that many find reassuring.

Of course the future value affects all car buying whether or not the car is pre-registered and the risk is eliminated with leasing.

If you’d like to know more about how leasing works and how it could work for you, please get in touch.  If you think others would be interested in this post, please share it.

Matt Spivey

Vehicle Leasing Neva Consultants
Left the corporate world in 2013 after ten years at Vodafone and now specialising in car and van leasing with Neva Consultants.Serial networker and member of BNI Wakefield Wealthbuilders, 4Networking and The TradesHub Academy South Yorkshire.

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