Fleet News

Used value controversy

VALUES for three-year-old cars have plummeted by 11.7% on average over the past year, according to the latest index from Alliance and Leicester.

The fall is only slightly less that the largest year-on-year fall it has ever recorded, which came in March. All categories saw a fall in value with family cars suffering the most, falling by 20% since April 2002.

It claims MPVs are down 16.9%, luxury cars down 10.3% and small cars down by 15.8%. Despite its claim of plummeting used car prices, new car prices have remained relatively stable, down by 0.8%.

This effectively means that the cost of running a car over three years is increasing as depreciation rises. In March, the guide was blasted by residual value experts for its claims that some three year-old upper-medium models had seen their value fall by 33% year-on-year.

Experts claimed it would be a disaster for the industry if they figures were true, but Alliance & Leicester's own experts hit back, saying their figures were sound and based on in-depth research.

The A&L Car Price Index is based on the best-selling models in eight categories, using mystery shoppers and price guides from What Car?. It is combined into an index and figures are weighted according to the volume of sales for each model.

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