What are they?

There are two ways of pre-registering cars:

(i) A dealer registers cars to themselves at the end of the month to hit the sales target set by the manufacturer, and then sells them on 90 days later. When you buy one, it will be immediately re-registered to you. If we ever offer you a pre-registered car it will be one of these, and there are no legal problems for you in buying one, though you should take note of the disadvantages listed below.

(ii) A broker arranges for you to purchase a car from a dealer, and the dealer delivers you the car. But instead of registering your car to you, the car is registered to a company that has nothing to do with you, so that the broker can claim a fleet bonus from the manufacturer. These cars are not usually re-registered to you for 3-6 months. Note that a car registered to you “Care of” an unrelated company is not registered to you, it is registered to the unrelated company. You should always avoid these as you could be committing a criminal offence, end up being prosecuted, get a criminal record and lose money which exceeds the value of the initial saving. We never supply cars using this practice.

Why?

If your car is not registered to you at the time you collect it, you will be committing a criminal offence and chances are that the person selling it to you has also committed a criminal offence by not giving you proper information. We explain below exactly why this is.

It is a criminal offence to keep and drive a car which is not registered to you at your address as the keeper. If you drive around in a car that has been registered to a company, or another third party, that is not otherwise related to the transaction then you could be prosecuted, fined and get a criminal record. This is because it is an offence under Section 43C of the Vehicle Excise and Registration Act 1994.

The financial disadvantages to you in buying a pre-registered car are:

(a) Your car will likely be worth a fraction less money when you come to sell it because it has two owners on the logbook (known as the V5).

(b) Most car insurance policies contain a clause which provides a ‘new for old’ replacement if their car is written off in an accident during the first 12 months of ownership. This clause is usually only available to the first registered keeper of a car. A car which is first registered in a company’s name and later re-registered would not qualify for this ‘new for old’ clause. A payout at market value may be worth several thousand pounds less than it would cost to replace the car for another new one.

The additional financial disadvantages to buying a pre-registered car from a competitor of ours that is registered as set out in (ii) above are:

(c) Up to 75% of insurance quotes are not available to you on the insurance comparison websites, if your car is not registered to you, which may mean you will have to pay more for your insurance.

(d) If you forget to declare to your insurer that you are not the registered keeper they may avoid paying out on a claim. If people are injured or killed in an accident this could be a very serious situation for you.

(e) Never pay a broker for your car because if they fail to pay the money onto the dealer then the dealer will reclaim the car from you.

What is our advice?

Don't buy a pre-registered car, no matter how cheap the car appears, unless it is registered to the dealer you are buying it from, and make sure that your car will then be re-registered to you the day you buy it. If your car is not registered to you immediately, then you will be in breach of Section 43C of the Vehicle Excise and Registration Act 1994 which is a criminal offence.

We have compiled a list of points to guide you to the safest route for the best deal:

  • Always insist on your new car being registered to you the day you receive the car;
  • Always pay a deposit directly to the dealer, do not pay any money to a broker in case they go bankrupt or fail to pay it onto the dealer;
  • Always pay your deposit on your credit card;
  • Insist on paying the final balance to the dealer direct, never pay a broker for your car because if they fail to pay the dealer then the dealer will reclaim the car;
  • Openly ask the broker about whether the car will be registered in your name as the 1st registered keeper;
  • Mention Section 43C of the Vehicle Excise and Registration Act 1994 to reinforce you know your rights;

What have the Courts ruled?

We recently prosecuted a competitor of ours for offering to sell their customers pre-registered cars using route (ii) above and failing to warn their customers of the risk of them being criminal prosecuted and the insurance and other financial disadvantages.

The Court ruled that it is an offence for someone to keep and drive a car that is not registered to them. Our competitor then pleaded guilty to the offence we charged them with and their company now has a criminal record.

We strongly suggest you avoid dealing with any broker which does not adhere to the law and offers you a pre-registered car that is registered using route (ii) above.

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