Pre-registration is becoming increasingly common as dealers look to drive volumes in order to release volumes, The National Association of Motor Auctions (NAMA) has warned.
To date, NAMA said, retailers had been able to absorb the influx of nearly-new stock that grew over 2015, however it questioned where this was sustainable.
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Paul Hill, NAMA chairman, said: "Maintaining the supply/demand equilibrium in balance is essential to sustaining residual values, which, following the growth of PCPs is arguably more important than ever before in our market.
"Right now many dealers are resorting to extensive levels of pre-registration activity to achieve the volume targets, which form an essential part of their profit mode. The growing risk is that the flood of product is exceeding demand bring with it an inevitable downward pressure on values."
While this might seem attractive to consumers, Hill noted that historic experiences showed that any significant fall in residuals had a knock on effect on consumer confidence.
NAMA said that while new vehicle registrations grew in 2015, much of this growth came from fleet. In order to keep up their own growth, the association said dealers were pre-registering vehicles at a level unseen for many years.
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