Ex-Demo vs Pre-Reg: The Differences
Not all used cars are created equal, but of course, you already knew that didn’t you? However, there's a notable difference between two very common types of nearly new cars you might not be quite so aware of. Although you’re probably well aware of one of them, the ex-demonstrator, you may never even have heard of the other category pre-registered cars. Both types of nearly new used vehicles are good news for buyers, but you must know the difference when you're shopping for the best deal.
Almost every used car buyer will know at least a little about ex-demonstrators. They're the cars the dealers use for test driving customers who are interested in their new cars, right? Well, not necessarily. Although the vast majority will be used for test drives, many of them will also be the company cars of dealership staff and even sometimes their family members.
You might want to keep that in mind when you’re considering buying an ex-demo. All of them will usually be taken off the road and put up for sale once they are three months old, and they will even be taken off the road earlier if the driver clocks up a certain amount of miles in one before the three-month point.
Some are used exclusively for test drives, and these will usually have really low mileage. Watch out for ˜ex-demos˜ that have very high mileage though, as these can sometimes really be ex-service loan cars and they may not have been looked after all that well by their many, many drivers.
If you see used cars that are the current registration and they only have delivery miles on the clock, you're probably looking at pre-registered cars. These are definitely not ex-demonstrators, although some dealers may advertise them as ex-demos because it saves what can be a complicated explanation.
These vehicles are to all intents and purposed brand new, but technically speaking, they are still considered used even though they've never been driven and used by anyone. These have been registered by the dealer with the dealer as the owner, so if you buy one you will be the second owner on the logbook.
Why do dealers pre-register vehicles?
Dealers sometimes register vehicles to themselves to meet sales targets set by the manufacturer. Although they've not been sold and registered to a customer, as far as the manufacturer is concerned they're registered for the road and that means they qualify as sold. This can mean dealership sales targets are hit and bonuses have been earned, and these bonuses can be anything from a few hundred pounds per vehicle to a couple of thousand or more.
Of course, dealers can't then sell these vehicles to customers as brand new anymore, and that means they command lower retail prices. Also, as soon as they are registered they start depreciating in value, so dealers need to move these pre-reg vehicles on as soon as possible or the money they made from the bonuses can be wiped out and they can then end up losing money.
Pros and cons of pre-registered cars
On the whole, pre-registered cars are good news for used car buyers, especially if buyers understand what they are. Dealers can lose serious money if they don’t sell pre-registered cars fast enough, so buyers are in a good position to drive a really hard bargain as long as they realise it.
There are two downsides you need to consider as well though. First of all, you will be the second owner and this can affect the eventual resale value. Secondly, the clock starts ticking on the service schedule the moment the vehicle is registered. Let's say you buy pre-reg that was registered six months ago, you'll be getting calls from the service department and warnings on your dashboard to take it in for its 12-month first service in six months and not 12.
If you ignore this and take the car in when it has been driven for 12 months or has done the appropriate mileage for a first service, but you'll have a lot of explaining to do if you try selling it with a full and complete service history if it didn’t have its first service until it was 18 months old.
Ex-demo and pre-reg cars can be great value for money, but only if you know what they are and what the difference is between them so you can get a deal that reflects the facts.