Briefly, under the new rules, a vehicle cannot be taxed without the V5 document. This has been introduced with the aim of reducing the opportunities to ring vehicles.
Understandable though this is, it will be a major inconvenience because 'docs to follow' on a vehicle at auction will be tantamount to saying 'buy this van and who knows when anyone can drive it legally' – hardly an attractive proposition. Traders and other buyers go to auction to source vehicles on the day that will offer some profit. If that means trading it immediately on for two or three hundred pounds then that's not a bad result.
But who is going to bother going for that kind of profit when the vehicle cannot be legally driven yet and there is every prospect of having to apply for a new V5? That two or three hundred pounds isn't worth all the hassle, especially when the vehicle may have fallen by that amount – or more – in the time they are waiting.
The finance companies are in for a really tough time because when they carry out early terminations – or snatch backs, as we in the trade would say – theses vehicles are going to have to go through the auction without documents. The buyer will have to apply to the DVLA (DVLA, Swansea S99 1DD) and it could take up to six weeks before a new V5 appears.
There is only one possible outcome – competitive bidding on vehicles with all the paperwork and disinterest in even high quality ones without. In our opinion a three-year-old vehicle without the paperwork will be worth £300 to £500 less than the identical example with docs.
Leasing and contract hire companies should have no excuse for not having documentation at the time of disposal but, judging by the number that currently do sell vehicles without, some will pay dearly. The auction companies will be charging for storage as the vehicles fail to sell first time around and that is another cost to consider. Other victims will be those trying to sell ex demos straight after registration to make target.
These dealers will have to wait for the V5 or sell them with the tax disc. In the end we are bound to see more untaxed vehicles on the road while the tax disc appreciates to more than its weight in gold.'