SELF-registration of new cars reached record levels in August, sowing the seeds of a potential residual value catastrophe in the nearly-new car market. By the middle of last month it was clear that earlier predictions of bumper new car sales were hugely optimistic, leaving dealers under pressure to register cars to qualify for volume bonuses.

Some estimates put the number of 'false' registrations as high as 20% of August's total sales of 505,312 units, down 3.85% on 1997's record 525,539 sales. The attack on self-registrations was led by Mitsubishi which denounced the 'huge pre-registration activity' in the last third of August and pointed the finger at Ford and Renault for registering 70.84% of the UK's daily total on the last day of the month, a claim dismissed by the two manufacturers.

The manufacturer said forcing the market was sending the wrong signals to the Government and the business and financial communities which used the car industry as a monitor to the overall wealth and spending trends of the country. Industry experts backed Mitsubishi's claims with Adrian Rushmore, chief car editor of Glass's Guide, saying: 'I have spoken to most of the big dealer groups and the overwhelming impression is that at no point since the last recession have we seen self-registration as prolific as it was this August. We go into September with more 'used' S-reg new-plate cars than at any point in the last seven years.'

Alan Pulham, director of the National Franchised Dealers Association, said: 'The difference with pre-registering now is that it has spread to many other manufacturers, it's not just the big boys doing it.' But the manufacturers were defended by Society of Motor Manufacturers and Traders' director of public affairs Roger King who said: 'There was less pre-registering this year than last year.'

Tim Ryan, editor of CAP Black Book, said that if S-plate cars don't sell quickly, the prices of '98 Rs would fall further: 'Cars were registered in August to achieve bonuses, and we have to wait to see whether dealers bank the bonuses or use them to cut the price of the cars,' he said. 'Not every dealer can afford to stock cars, and there is a question mark over buyer confidence because all those who wanted a new car in August will have ordered it in July. The only way to tempt other buyers is on price.'