Pre-registrations are returning to the UK new car market, signalling another sign of the difficulties currently surrounding the industry.

Members of the Vehicle Remarketing Association were told of the growing trend at the organisation’s July member meeting. Speakers Mike Jones, chair of ASE Global and Rupert Pontin, insight director at Cazana, both indicated in their presentations that late-month registration activity was increasing.

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Jones said: “There is little question that pre-regs are back. Over the last few years, that kind of activity had declined in a fairly dramatic fashion, especially with the shortages of some models that followed WLTP.

“However, that has changed. There is now a lot of registration activity going on towards the end of each month. It’s yet another sign of the difficulties surrounding the new car market.”

Pontin added: “Pre-regs are really an indication of production overcapacity and disorderly marketing, both factors that have become part of the new car market in the last year or so. It is not surprising to see their return at this point.”

A pre-registered car is a new vehicle purchased by the manufacturer or dealer and registered in their name. The move is done to add extra sales to quarterly/annual results, despite the cars remaining on the forecourt.

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Pontin said the problem is likely to become more acute as 2019 draws to a close as there is a race to dispose of non-RDE2 vehicles. New models must be compliant from January 2020 and all cars from January 2021.

“Simply because of the new car sales fall over the last 18 months or so, coupled with stockpiling because of Brexit, there is a lot of unsold metal around,” continued Pontin. “The temptation to pre-register is very high and perhaps irresistible.”

Sam Watkins, chair at the VRA, said that the return of pre-registrations were understandable. “Pre-registering is a safety valve for a new car sector that is suffering from a combination of negative factors, from Brexit through to the decline of diesel.

“However, it does bring a degree of uncertainty to the used sector, especially surrounding nearly-new residual values. We expect it to be a subject that grows in importance for our members into 2020.”