Helpdesk

THIS WEEK:What does pre-registration mean to me?

From RO’B: Last week you ran a story on the number of new cars taxed in the first four months of the year. They were different from earlier figures I’d read in your paper on new car sales. Surely the two should match?

There is a discrepancy between the number of new car registrations and new cars taxed.

According to the official figures, 52,609 new cars were registered between January and April, according to figures from Revenue published by the Society of the Irish Motor Industry (SIMI). During the same period, 45,469 new cars were taxed for the first time, according to the Central Statistics Office.

That’s a difference of 7,140, meaning that 13.5 per cent of new cars registered this year have yet to be taxed. While there may indeed be a backlog in new buyers taxing cars bought in the last few days of the month, the difference equates to more than all cars registered in April.

Leaving aside the fact that some of these may well be people driving around without tax, many in the industry suggest the difference is largely being made up by the false economy of dealers registering cars before they are sold. To anyone outside the trade, this seems bizarre if not downright stupid. Why stamp a car with a registration plate – thereby denting its value – if there is no confirmed buyer?

This is often caused by dealers and distributors looking to improve sales figures in order to reach bonus targets or beef up their market share. In the trade it’s known as “pre-registration”.

Why should it matter to customers? For savvy buyers, it means bargains are there to be had. A pre-registered car has little or no mileage but there is the chance to haggle with the dealers as the numberplate on the front means the clock has started to tick towards the end of year when the car will obviously lose more value even if it hasn’t moved off the forecourt.

It may have no mileage and be as spotless as its unregistered twin next to it, but it’s branded with a number plate that will make it a year old in the buyer’s eyes once January arrives.

But a high volume of pre-registered cars can dent the resale value of used cars. With a lot of pre-registered cars on the market, discounts follow and that means the official new car list prices no longer reflect the starting point. Like any heavily-discounted product, the used buyer will base the value on the original discounted price, not the list price. When it’s a handful of cars, it’s not a problem, but if it reaches double-digit percentage of the market, it will have consequences.

In terms of the market, pre-registrations also create a false sense that things are better than they are. One thing’s for certain – whether it’s the registration or motor tax figures, sales are down.

Got a query? Send it to motorshelp@irishtimes.com