Garages that sell new cars tend to have monthly targets to hit. If they hit these targets they'll get a bonus - and if they don't, they won't.
So it's in their interests to make sure they hit those targets. That's easier said than done though, if the target is high and there are no customers to sell to.
The thing is, the new car market doesn't work on sales – it works on registrations, which is something else altogether. Car makers focus on new car registrations because that's seen as the marker of success.
So if a garage can't find a customer for that car sitting in the compound, it can register the car in its own name.
You can potentially buy a brand new car for the same money as somebody else’s used car
So while the car hasn't been sold as such, it does go down as a new car registration, because it’s been registered. But the dealer has a problem; it has a car registered in its own name, but it doesn't have a buyer for it.
What's more of an issue is the fact that because the dealer's name is now on the registration document, when the real first owner coughs up and gets the car registered in their name, they'll appear as the second owner, so it’s effectively a second-hand car.
To entice customers into buying these 'pre-registered' cars, the dealer has to sell them at a reduced price, even if they've covered virtually no miles. After all, the car is – on paper at least – a used car.
If you're wondering what the point of it all is, it's because the success of a car maker is often judged on how much of the new car market it has. It used to be the case that all mainstream car makers effectively bought their market share by registering huge numbers of new cars.
But times are tough now and such tactics lead to big losses. And most car makers are struggling to survive, so they can’t afford to buy market share so much, which is why although pre-registering still happens, it's not as common as it used to be.
So why should you care about pre-registered cars? Simple – you can potentially buy a brand new car for the same money as somebody else’s used car. If you want to take advantage of a pre-registered bargain, watch out for supposedly used cars being advertised with delivery mileage only.
As the targets have to be hit at the end of the month, it's at the very end of the month or the start of the following that these pre-registered bargains are to be had – but finding them is completely hit and miss. A dealer might have several one month then none for ages after that – which is why you need to shop around.