Using data compiled and distributed by eurocarprice.com, produced by Automotive Directions in association with Credit Suisse First Boston, Eurotax, PricewaterhouseCoopers, JATO Dynamics and the Centre for Automotive Industries Management at Nottingham Business School, the quarterly index gives the retail residual value of two-year-old cars at an average mileage for the segment (ranging from 11,000km for small cars to 20,000km for large cars).
Roger Dal Santo, international sales and marketing director of Eurotax, said the two-year-old threshold was the stage in cars' lives when the differences between their residual values were most pronounced.
The first index shows that the spread in residual values across Europe is as great as the spread in new car prices and the UK has the highest residual values in Europe (44% above the average), while Belgium has the lowest (13% below the average)
Making the link between supply and demand, Dal Santo said: 'As soon as the demand for used cars fails to keep pace with the demand for new cars, the quantity in used car stock rises, residual values fall and problems arise for manufacturers, franchised dealerships, banks and leasing companies.'
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