Market decline slows down but bumpy ride is forecast

IMPROVEMENTS in the rate of decline of used car values were maintained last month, according to latest figures from CAP Motor Research. CAP's used car values index - the automotive equivalent of the 'Footsie' - based on a basket of 98 cars at three years/45,000 miles showed trade prices fell 3.8% year-on-year in February, the same rate as January but a significant improvement on the last four months of 1998.

However, CAP chief economist Mark Cowling said: 'Nervousness is creeping back into the market as dealers await the necessary upswing in retail demand to justify their buying activity. 'But it is too early to claim substantial improvements in the market and CAP continues to predict market instability throughout the year. While any signs of stability are welcome we remain cautious about the medium term prospects. Trade buyers have been out in force but without the strong retail demand in the showroom which would justify their confidence. We forecast a bumpy ride for 1999 and there is no reason yet to change that view.'