A BUOYANT start to the year's used car sales might spell trouble on the horizon, according to CAP Motor Research. Used car prices are still up to 20% down on this time last year according to CAP Black Book senior editor Tim Ryan but for the first time they are creeping up on the recent months' plunge in values.

Auctions are reporting price increases on many models, including a recovery in late plate volume cars such as the Ford Mondeo and Vauxhall Vectra which increased by about £200 on pre-Christmas levels, according to Glass's Guide. The ICA group says some popular models are fetching up to £500 more at auction than they were just a few weeks ago. British Car Auctions can report similar successes throughout the country. British Car Auctions' joint managing director Andrew Hulme said: 'With a relative shortage of quality stock in the market place, and the limited supply of part-exchange business being generated, the auction hall is a very competitive place indeed.'

But it is this limited supply which CAP Black Book editor Craig Adamson says could see residuals fall to yet another low with the arrival of the T-plate. He said: 'The auctions are certainly looking fairly buoyant and the dealerships have levelled off, but there is a simple explanation for this, and that is people are hanging on to cars for the arrival of the T-plate.

'We have never gone through a double registration before, so it is pretty much an unknown, but it is certainly causing a shortage of supply at the moment. We will have to wait and see whether the current shortage means the market will be flooded in March.'