THE Government and the Consumers' Association are wiping hundreds of pounds off the value of used cars with 'ill-considered' attacks on new car pricing, costing drivers more to run cars instead of saving them money. Headline-grabbing campaigns alleging that car buyers in the UK are ripped off every time they purchase a new vehicle are having little effect on new prices, but they are decimating the used car market and costing motorists heavily when they sell their cars.

The CAP Index, for example, has recorded an average 5.9% decline in second-hand values compared to November 1998. The worst hit sectors are sports cars, down by 10.8%, MPVs down by 8.4%, executive cars down by 8.1% and 4x4s down by 7.7%. In the volume sectors, superminis are down 6.3% year-on-year, lower medium cars are down 5%, and upper medium models down by 3.5%, and CAP does not expect any improvements in the used car market before the middle of next year.

Latest figures from the Alliance & Leicester Car Price Index show that nearly-new prices have fallen 9.1% and used values by 5.1%. Mark Norman, editor of CAP Monitor - Future Residual Values, said that uncertainty over the effect of the new millennium on car prices and the twice-yearly plate change, had been increased by worries over a sudden slump in new car prices.

'The Competition Commission and the Consumers' Association have cost everyone in the industry a lot of money pedalling rubbish,' he said.