What Car? Q&A - How do registration plates work?

Q: I am looking to buy a new car, but I am confused by the registration system. How often do registrations change, and when, and what impact does this have on a vehicle's value?
Alexander J. F. Bond

A: In September 2001, the UK numberplate system was changed to make it easier to identify when a car was registered and where it came from.

The first two letters of the plate signify the car's place of origin, the next two numbers its age and the final three letters are random.

At present, the first number is either a '5' or a '0', depending on when it was sold.

A '5' signifies that the car was registered between September 1 of the year shown by the second digit and February 28 of the following year (so '54' would mean it was registered between September 1, 2004 and February 28, 2005).

A '0' signifies that the car was registered between March 1 and August 31 of the year shown by the second digit (so '05' would mean it was registered between March 1 and August 31, 2005).

When we reach March 1, 2010, the first number will either be a '6' or a '1' to signify the change in the decade, while the second number will continue to correspond to the final number in the year.

The year on a car's numberplate can seriously affect the car's value. Even if a '56' plate is bought on February 28, 2007, it will be perceived to be six months older by buyers and sellers than a car registered on March 1, 2007, which would have an '07' plate.

How much a car loses its value varies from model to model, but the older the numberplate, the less a car is worth (except for classic cars).

Whatcar.com offers a depreciation calculator to help you work out the drop in value of all cars in their first four years. To use this guide, click here

New cars generally depreciate fastest in their first year, making year-old cars a good buy, because they will have come down in price by the largest margin of their life cycle (although mileage rates can affect this).

For further advice on depreciation from whatcar.com, click here