What Are Nearly New Cars?
All you need to know about the different types of nearly new cars
What actually constitutes a "nearly new" car can depend on your point of view. If you're the sort of person who generally keeps a car for a decade or more, a nearly new car could be a lot older than it would be to someone who never keeps a car for more than a couple of years. It doesn't help that there's really no accepted industry definition for nearly new cars, almost new cars, or whatever you choose to call them. For many people, Autotrader is one of this country's best-known car-buying resources, and its definition of a nearly new car is one under twelve months old with less than 10,000 miles on the clock. Even going with that definition there are a number of different types of nearly new cars to consider, so let's take a look at what they are and consider the relative merits of each.
Also see: What are Pre-Reg Cars?
An ex-demonstrator is a car which has previously been used for test driving prospective new car buyers by a dealership. It will have been registered to the dealer initially, so you will be the second owner if you buy one. Ex-demos are usually in service for 90 days before they can be sold and replaced with another. This is a rule of the manufacturer as they'll usually give the dealer what's referred to as a de-fleet bonus at the end of this period. This is an amount of money used to reduce the cost price of the car to the dealer so it can be sold at a lower price than a brand new one. If this de-fleet bonus didn't exist an ex-demonstrator would sit on the dealer's balance sheet at the same cost as a brand new one, which would make it a pretty expensive used car and hard to sell without losing a considerable amount of money.
The amount of miles an ex-demonstrator will have covered by the time it is put up for sale can vary considerably from car to car. While some are static demonstrators that are only ever used for test drives, most tend to double up as company cars for staff members. A static demonstrator could go up for sale after 90 days with just a few hundred miles on the clock or even less, whereas one used as a company car could easily have quite a few thousand miles on it. Most dealers will set an upper mileage limit and cars will not be used anymore when the limit is reached. The mileage on the car will inevitably have an effect on its sale price. It is possible to agree a deal in principle to buy a demonstrator before it's been registered for 90 days and is openly put up for sale, but you'll have to speak to the individual dealer about it and it may continue to be used up to an agreed mileage limit.
Find out more about ex-demosREAD OUR GUIDE
Pre-reg cars can be a bit of a mystery to those outside the retail motor industry, and it's common for people to confuse them with ex-demonstrators. The main difference between pre-registered and ex-domo cars is pre-registered cars will not have been used and are effectively new cars. The key word to remember there though, is "effectively." Although a pre-registered car will have delivery mileage only on it just like a brand new car, it's already been registered with the DVLA and the buyer will therefore be the second owner, just as with an ex-demo.
Apart from it already having been registered, a pre-reg is pretty much the same as a brand new car. In fact, it may not even have been delivered to the dealership yet and could still be sitting in the factory compound when you agree to buy it.
There are a number of reasons cars get pre-registered, but it's usually down to sales targets. Industry sales figures are concerned with how many cars have been registered during a period, and not who they're actually registered to. Whether a car has been registered to a dealer, a leasing company, a fleet or a retail buyer, it still represents a sale. Dealers can sometimes be offered financial incentives by manufacturers to hit a monthly or quarterly sales target, so it sometimes makes sense to register cars that don’t have buyers yet, and then sell them on as pre-registered. Just as with ex-demos some of this money can be used to lower the price of the car, which can make them extremely attractively priced compared to a brand new, unregistered version of the same car.
The only thing to note about pre-registered cars is the fact discrepancies can occur as far as the service history is concerned later on in its life. The records held by the DVLA will show the car was registered on a certain date, and most cars are supposed to be serviced 12 months after that date or after a certain amount of miles, whichever comes first. The problem occurs if the car wasn't sold until several months after it was registered. If the buyer doesn't do a great deal of mileage and the car was registered five months before they took delivery for example, the 12 month service will effectively be due after just seven months. If it's serviced 12 months after delivery, even though the car's electronic service interval indicator may be correct, a prospective buyer in the future may feel a service interval has been missed. If you lease the car this isn't a problem, but if you bought the car, it could have an adverse effect on the resale price when you come to sell it.
Find out more about pre-regREAD OUR GUIDE
Almost new cars
Now we've covered the somewhat black and white issues of ex-demo and pre-reg cars, now we come to the less-definitive area of almost new cars. As mentioned at the start, what qualifies as nearly new will vary from buyer to buyer, but for the sake of argument, we'll use the Autotrader definition of less than 12 months old with less than 10,000 miles on the clock. Cars fitting this description without being pre-reg or ex-demos are probably more common than many might imagine. They could be finance repossessions, ex-manufacturer cars, ex-rentals, over-stocks or even early trade-ins.
Although one of these might only be a few months old and only have covered a few thousand miles, it's advisable to approach them just the way you would with a used car of any age or mileage. Find out how many owners it's had, look to see who it was registered to originally, and check any relevant service history. As long as you're as diligent with one of these almost new cars as you would be with an older one, you could end up with a real bargain. It's not as much of a sure thing as a pre-reg or an ex-demo, but it could present the chance of a real bargain. It will still have the balance of the manufacturer's warranty so you've a good degree of reassurance there, but be prepared to ask some awkward questions if it's already had several owners in a short space of time.
Nearly new cars can represent a genuine bargain compared to a brand new model, but keep in mind what you are buying. It's perfectly correct to expect a pre-registered car to be as pristine as a brand new model because apart from a paperwork exercise, that's exactly what it is. However, an ex-demo or an almost new car is still a used car. That means the tyres will have some wear and there may be the odd slight mark here and there. You may be able to get any minor blemishes amended as part of the deal, so check a nearly new car over as thoroughly as any used car before agreeing on a deal.
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