NEARLY one third of vehicles on outright purchase fleets are being sold without vital documentation – an error that could send residual values plunging, experts warn.

From next month, new legislation demands that a vehicle owner must have the vehicle registration document, or V5, in order to tax it and many used car buyers are shunning any vehicle offered without one, or drastically reducing the amount they are prepared to pay.

But new research from British Car Auctions has shown that only 70% of fleet vehicles owned and operated by companies had their V5 documents with them at remarketing time.

Tom Madden, customer affairs director at BCA, warned: 'Wholly-owned fleets should be the easiest to administer in terms of providing V5 paperwork, but appear to have the most trouble in delivering the correct documentation at the time of sale.

'Any vehicle can be sold without a V5, but if you want to maximise the value that is not the route to take. Just look at the sectors that live or die by their used car performance – the dealer and trade and lease and rental sectors. It is no coincidence that they are selling in excess of 90% of vehicles with V5s.'

According to BCA's figures, in the first nine months of 2002, around 63%-65% of cars were sold with a V5. That number rose to around 74% in December. Some areas of the industry have responded more effectively, however. Fleets run by dealers, rental motor trade and manufacturers all scored well, with nine out of 10 having the right documentation.