Residual values will fall in the next 12 months by a couple of percentage points - and up to 8% in the next three years - resulting, in part, from the pre-registering of cars in order to satisfy annual sales targets risks.

New rules over bank capital adequacy, exposure to potential losses from any fallout from a banking crisis on mainland Europe and the softening of the UK automotive market all have the potential to drive down RVs, according to the latest European Automotive Report from Experteye.

It is predicting RVs will drop in the UK by a couple of percentage points over the next 12 months or so, with a potential of a short term dip of up to 7-8% for a three to six-month period over the next three years.

Pre-registrations will play their part, especially if new car retail activity during September – a plate change month – fails to live up to the volume expectations of manufacturers.   

Dean Bowkett, the report’s author and managing director of Bowkett Auto Consulting, said: “Dealers register cars enjoying higher discounts to offset the initial depreciation on the vehicles they will use as demonstrators. These registrations often happen towards the end of the month because dealers also use this as a way to hit their volume targets, which unlock backend bonuses. 

“The problem the industry has created across Europe is that dealers, supported by manufacturers, have been using this as a way to get ultra-low mileage, very young cars at a transaction price which is more competitive than a brand new vehicle.” 

Experteye analysed daily registration figures from the Society of Motor Manufacturers and Traders (SMMT) for the period from November to May for 2013-14, 2014-15 and 2015-16. 

It showed that, while 57.8% of the share of total growth in new car sales were registered in the last five working days of the month in 2014-15, that figure has now fallen to 23.8% a year later. 

“It could be that self-registrations are still high but they are just being done earlier in the month.”

Analysis of pre-registration activity from Glass’s shows that pre-registration peaks in January, when cars registered the previous September are at their highest volume in the market, and in September following the March plate change. 

Rupert Pontin, director of valuations at Glass’s said: “Looking at the latest figures from data on the 16-plate change, pre-registration volume was 8.7% higher in July 2016 and a worrying 22.5% year-to-date. 

“With this level of increase there is little doubt that there will be downward pressure on all used values in the coming months and manufacturers will need to consider the impact of any tactical push, both now and for the future.”

The latest SMMT data shows that fleet and business registrations are continuing to help drive demand in the new car market.

Year-to-date performance remains positive, up 2.8% to 1.68 million units, with fleet and business registrations accounting for 54.8% of the market at 921,520 units. However, growth from the previous month was just 0.1% and in June new car registrations fell year-on-year.

James Dower, senior editor of Cap HPI Black Book, said: “The majority of manufacturers still have significant volume aspirations for the remainder of the year.

“The new car retail performance in September will dictate just how far-reaching the effect of pre-registration activity will be over the used car market in the final months of 2016.”