- Find out the difference between used and 'nearly new'
- Where do nearly new cars come from?
- We explain the pros and cons
For the used car buyer there’s a vast amount of choice. You’re not just limited to buying cars that have been registered and used by someone else. You can also buy the ultimate second-hand car: a motor that’s nearly new, has been registered to someone else so is technically used, but may have hardly been driven.
If you’re looking at used cars that are less than a year old, with fewer than about 5000 miles on the clock, a nearly new car could be just what you want. Here’s why they’re great value for money.
What is a nearly new car?
Nearly new cars will in most cases be less than six months old. They’ll have had only one owner, but they probably won’t have covered many miles, in some cases possibly only a handful. More importantly for the used car buyer, the owner they’ve had won’t be a traditional car buyer. There won’t be any coffee stains in the cupholders or baby food stuck to the back seats.
Frequently known as demonstrators or pre-registrations, nearly new cars will have been a brand-new car that was registered by the franchised dealer. The car will then have either been used to demonstrate that model to prospective customers, or maybe even just parked round the back of the showroom for a few months.
Cars like this make great used buys because they don’t have the principal disadvantage of a new car. That is, they cost a lot less money despite being just a couple of months old.
It’s impossible to say how much cheaper the car will be than its new counterpart. That depends on how desperate the dealer is to get rid of it. But the discount compared with its new price should be about 10-15% and could be as much as a third.
They will also have a couple of years of manufacturer warranty remaining which will give you the peace of mind of being covered if anything major goes wrong.
Where do nearly new cars come from?
You will usually only get a demonstrator or pre-registered car from a dealer. But if dealerships have a lot of them, they may ship them off to used car supermarkets or web dealers which sell them on their behalf.
These nearly new, demonstrator or pre-registered cars come about because of the strange way the car industry works.
Dealerships are set sales targets by the manufacturers they represent. They have financial rewards for hitting these goals, usually at the end of each month, sometimes every quarter.
As the profit margin in new cars is so small, they can get more in the way of bonuses from the manufacturers for hitting their targets than they make selling the cars to ‘real’ customers. Their answer is to buy the car from themselves.
They register it so that it counts as a sale and then sell it as second hand. Obviously, they won’t sell it for as much as if it was new, but that doesn’t matter. The discount they sell it for is offset by the bonus from the manufacturer for hitting their target.
What’s the snag with nearly new cars?
If pre-registered cars sound too good to be true, there are a couple of downsides to remember. First, yours will be the second name on the registration document. When you come to sell the car, you won’t get as much as if you’d been the first owner.
And second, as with any used car, you’re restricted on colour and the kind of trim you’ll get. However, this may not be a bad thing. The dealer will have specified the car with a view to making a quick sale so the car will have the sort of kit that most people want on that kind of car.
Nearly new cars may also have covered a few thousand miles which at least means they’ll be run in. On the downside, they may no longer have the new-car feel that’s so important to some people. But one thing’s for sure, they’ll probably be in much better nick than an equivalent used car that’s had a traditional owner.
What to look out for
There are a couple of underlying reasons dealers might pre-register a car. It might be an outgoing model. They will have had to clear the old version from their showrooms in order to make room for the sexier new model. It means you won’t be getting a car with the most up-to-date kit and the latest look. But if you’re getting it for a seriously knock-down price, that might not be a problem.
Which brings us onto price. When you’re buying a nearly new car, you must get it for the right money. Car dealers will frequently give large discounts on new cars, perhaps through finance incentives. Make sure that any nearly new car is priced accordingly low. Remember, this is a second-hand car after all.
Also remember that manufacturers have model years for cars. The equipment, colours offered and so on can change between these model years. If you’re buying a pre-registered car, find out exactly what model year you’re getting. If you think it’s a 2019 car but it’s actually 2018, you may take a hit on the price when it comes to selling it on.
There’s lots to recommend them
With a nearly new or pre-registered car, you can enjoy many of the benefits of a new car but for thousands of pounds less. And you’ll be able to drive away in it immediately because it’ll already be at the dealership. There’ll be no choosing the exact shade of paint then waiting for months while it’s built and delivered.
There’s also a large opportunity to haggle on the price of nearly new cars. Remember that a dealership has its own money tied up in pre-registered cars so they’ll be keen to get it off their hands.
See also:
Best electric cars for £20,000
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